Elements of the Organizing –
Introduction
Organizational
structure is a formal system of working relationships that both separates and
integrates functions and duties. While separation of duties identifies the work
responsibilities for each employee, integration of duties guides people how to
engage together in teamwork. This enables combining all resources together
effectively to achieve the operational and strategic objectives of a company.
Those Strategic
objectives, along with the mission and the vision of a company, shall determine
the organizational structure that facilitates the correct
implementation of the strategy and business plans.
Organizational
structures are implemented to ensure that every aspect of the organization,
employment, decision making, and management is integrated within the strategic
objectives of the company and that it contributes to the successful achievement
of those objectives.
Organizational
structures help managers and employees work together effectively by forming a
basis for the following:
1.
Assigning employees to well-defined duties that
enables them to realize their objectives and incorporate these into the
strategic objectives.
2.
Clarifying employees’ responsibilities and how they
should use lines of authority based on the organizational structure, which
eases responsibility and accountability.
3.
Designing effective communication channels that define
the flow of information and employees’ relationships, to ensure effective
organizational performance.
Elements of the
Organizational Structure
The four basic
elements in designing a suitable organizational structure for a company.
Specialization
Is the process of
identifying tasks and assigning them to individuals or work groups who have
been trained to do them? Managers could be differentiated into two types:
Business Managers who usually supervise one subsidiary and Functional Managers
who might oversee a function such as finance.
Standardization
Standardization is
defining the managerial levels in a clear manner, and unifying job titles and
organizational entities within the same managerial level.
Coordination
Coordination is the
formal and informal procedures that integrate the activities performed by
separate groups in an organization. Departmentalization divides the
organizations’ work and allows for specialization and standardization of
activities. However, in order to achieve organizational objectives, managers
also need to coordinate people, and tasks. Coordination facilitates integration
between different functions, since coordination can be defined as the process
of integrating all the parts of the whole to achieve common objectives. Without
coordination, people’s efforts are likely to end in delay, frustration, and
waste.
For these reasons,
you need to consider coordination as one of the basic elements of the
organizational structure. Whereby, Coordination has three basic
principles:
1. Unity of Command
Principle
The unity of command
principle states that an employee should have only one direct supervisor. Every
employee needs to know who is giving the orders and to whom he or she reports.
Organizational
structure must minimize any confusion over who makes decisions and who
implements them, since uncertainty in this area can lead to serious
productivity and morale issues.
2. Scalar
Principle
The scalar principle
states that a clear and unbroken chain of command should link every person in
the organization with someone at a higher level, all the way to the top of the
organizational structure. Tasks should be delegated clearly, with no
overlapping or splitting of assignments.
3. Span of Management
Principle
The span of
management principle states that the number of people reporting directly to one
manager must be limited since one manager cannot effectively supervise many
subordinates.
There is no specific
number of subordinates that a manager can supervise effectively. The four key
factors that determine the best span of management for this given situation:
1.
The competence of the manager and the employees.
2.
The similarity or dissimilarity of tasks being
supervised.
3.
The incidence of new problems in the manager’s
department.
4.
The extent of clear operating standards and rules.
Authority
Authority is the
fourth element of organizational structuring; it is the right to act or
decide. Authority implies responsibility and accountability, i.e.
managers accept the responsibility for acting and are willing to be held
accountable for success or failure. Furthermore, when delegating tasks to
others, managers should take into consideration to match the responsibility
they confirm with authority and then insist on accountability for
results.
1. Responsibility
Responsibility is an
employee’s obligation to perform assigned tasks. The employee acquires this
duty upon accepting the job or a specific assignment. A manager is responsible
not only for carrying out certain tasks but also for the actions of
subordinates.
2. Accountability
Accountability is the
expectation that each employee will accept credit or blame for results achieved
in performing assigned tasks. Management also expects employees to report the
results of their work. This feedback enables management to determine whether
affective decisions are being made and whether tasks are being performed
properly.
A manager cannot
check every task an employee performs. The manager should establish guidelines
within which work must be done, and then the employee is accountable to
perform within these limits. Thus, unlike authority, accountability always flows
from the bottom to the top. It should be emphasized that accountability is the
point at which authority and responsibility meet.
3. Delegation of
Authority
Delegation of
authority is one of the important issues which was considered during
establishing the organizational structure and could be defined as the process
by which managers assign the right to act and make decisions in certain areas
to subordinates. In other words, the manager assigns a task to a subordinate
along with adequate authority to carry it out effectively.
Delegation starts
when the structure of the organization is being established and tasks are
divided. It continues as new tasks are added during day to day operations. The
basic components of the delegation process are determining expected results,
assigning tasks and the authority to accomplish them, and holding others
accountable for results achieved.
4. Centralization and
Decentralization of Authority
Centralization and
decentralization of authority are basic overall management philosophies of
delegation of where decisions are to be made. Centralization of authority is
characterized by authority concentrated at the top of an organization or
department.
Decentralization of
authority is characterized by high degree of delegated authority throughout an
organization or department. The centralization is an approach that requires
managers to decide what and when to delegate, to carefully select and train
personnel, and to formulate adequate controls.
