Technological Management & Entrepreneurship Development 21EC51

MODULE 2
ORGANIZING AND STAFFING:
INTRODUCTION:
An organizing is a social unit or human grouping deliberately structured for the
purposeof attaining specific goals. – by Amitai Etizoni
Ex: Corporations, Armies, Schools, Hospitals, Churches, Prisons etc.

Q.No: 1 PURPOSE OF ORGANIZATION:

It is important to study organization for the following reasons.
1. A man is born in an organization (hospitals or clinics), educated in organizations
(schools, colleges and universities) and he works in organizations (offices or factories).
2. Organizations satisfy and frustrate different kinds of human needs. As pay masters they
satisfy the physiological needs of the employees. They satisfy various kinds of
security, social and egoistic needs of their people. On the other they cause people to
feel robbed of their autonomy who are engaged in monotonous jobs and who are unable
to climb the promotional ladder leading to frustration.
3. Knowledge of organizations helps manager to work effectively. They learn various
things, such as how to pro-act to environmental needs, how to motivate subordinates,
how to manage conflict, how to introduce change and so on.
4. To behavioral scientists, organizations serve as a natural lab. They provide an ideal
setting for the study of human behaviors. Research into and study of organizations
leads to many important discoveries vital for the continued wellbeing of our-society.

Q. No- 2: Describe about Process of Organization.

PROCESS OF ORGANIZATION:
Organization is a process of defining and grouping the activities of enterprise and
establishing the authority relationships among them. This would be both differentiating and
integrating. Differentiation and integration is described in the six steps below:
1. Consideration of objectives: This is the first step in the process of organization
because objectives determine the various activities which need to be performed and the
type of organization which needs to be built for this purpose.
2. Grouping of activities into departments: The next step is to identify the activities
necessary to achieve them and to group the closely related and similar activities into
divisions and departments. This is called departmentalization.
3. Deciding which departments will be key departments: Key departments are those
which are rendering key activities, i.e. activities essential for the fulfilment of goals.
Such key departments demand key attention. Other departments exit merely to serve
them. Key departments are placed directly under higher management.
Which department needs to be emphasized how much will depend, of course, on the
company's objectives and the way it seeks to be distinctive. For example, a company
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which believes that advertising is a primary key to success will set up a separate
advertising department that reports directly to the president. But another company
which considers it much less important way only create a separate section for it under
its sales department.
4. Determining levels at which various types of decisions are to be made: Each firm
must decide for itself as to how much decentralization of authority and responsibility it
wants to have. Extreme decentralization may lead to loss of control and effective co-
ordination as a result of which the firm as a whole may fail to achieve its overall
objectives. Extreme centralization, on the other hand, may lead to wrong decisions at
wrong times and complete breakdown of the morale employees.
5. Determining the span of management: The next step would be to design a structure
to determine the number of sub-ordinates who should report directly to each executive.
The narrower the span, taller the structure with several levels of management. This
complicates communication and increases payroll. Therefore flat structure is desirable.
6. Setting up a co-ordination mechanism: As individuals and departments carry out
their specialized activities, the overall goals of the organization may become submerged
or conflicts among organization member ay develop. Coordinating mechanisms enable
the members of the organization to keep sight of the organizations goals and reduce in
efficiency and conflicts.

Q.No- 3: Define Organization. Briefly explain the principles of Organization.

PRINCIPLES OF ORGANIZING:
If there is to be a systematic approach to the formulation of organization structure, there
might to be a body of accepted principles. The principles as follows:

1. Objectives 9. Authority
2. Specialization 10. Efficiency
3. Span of control 11. Simplicity
4. Exception 12. Flexibility
5. Scalar principle 13. Balance
6. Unity of command 14. Unity of direction
7. Delegation 15. Personal ability
8. Responsibility

1. Objectives: They should be firstly, clearly defined as they influence the organization
structure.
2. Specialization: Activities of the enterprise should be divided and assigned to persons
according to their specialization.

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3. Span of control: The number of persons to be supervised should be as far as possible,

minimum. Reasonable number of sub-ordinates is only six.
4. Exception: Exceptionally complex problems are to be referred to executives at higher
levels as they have limited time. Routine matters are to be deal with by sub-ordinates
by lower levels. This enables executives to denote their time to more important and
crucial issues.
5. Scalar principle: Also called chain of command. Line of authority from chief
executive at the top to the first-line supervisor must be clearly defined.
6. Unity of command: Each subordinate to have only one superior whom he has to obey.
Dual sub-ordination to be avoided since it causes uneasiness, disorder, indiscipline, and
undermining of authority.
7. Delegation: Proper authority should be delegated at lower levels of organization also.
The authority delegated should be equal to responsibility i.e. each manager should have
enough authority to accomplish the task assigned to him.
8. Responsibility: The superior should be held responsible for the acts of his sub-
ordinates. No superior should be allowed to avoid responsibility by delegating authority
to his sub-ordinates.
9. Authority: Authority is the tool by which a manager is able to accomplish the desired
objective. Authority to be clearly defined and equated to responsibility.
10. Efficiency: The organization structure should enable the enterprise to function
efficiently and accomplish its objectives with the lowest possible cost.
11. Simplicity: The organization structure should as simple as possible and the
organization levels, should as far as be minimum. A large number of levels of
organization levels means difficulty of effective communication and co-ordination.
12. Flexibility: Organization to be flexible. It should be adaptable to changing
circumstances and permit expansion and replacement without disruption of the basic
design.
13. Balance: There should be a reasonable balance in the size of various departments,
between centralization and decentralization, between the principles of span of control
and the short chain of command, and among all types of factors such as human,
technical and financial.
14. Unity of direction: Unity of direction facilitates unification and co-ordination of
activities at various levels.
15. Personal ability: As people constitute an organization there is need for proper
selection, placement and training of staff. The organization structure must ensure
optimum use of human resources and encourage management development programs.

Q. No: 4Span of Management:

The span of control or management indicates the number of subordinates who can be
successfully directed by a supervisor. It is often referred to as span of management, span
of supervision, span of authority.
• Management experts suggest that the ideal number of subordinates is four in case of
higher level management and eight to twelve in case of lower level management.

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Span of management is important because of two reasons.

1) First, the span of management affects the efficient utilization of managers and the
effective performance of the subordinates.
If the span is too wide, managers are over burdened and subordinates receive little
guidance.
If the span of management is too narrow, the managers are underutilized and
subordinates are over controlled.
2) The second reason is there is relationship between span of management and
organization structure.
A narrow span results in tall organization with many levels of supervision between top
management and lowest organizational levels which creates more communication and
cost problems.
On the other hand, a wide span for the same number of employees results in flat
organization with fewer management levels between top and bottom.

Fig 1. Narrow and wide span of management.

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1. Organization with narrow span:

fig.a. narrow span.

Advantages:
• Close supervision
• Close control
• Fast communication between subordinates and superiors

Disadvantages:
• Superiors tend to get too involved in subordinates work
• Many levels of management
• High cost due to many levels of management
• Excessive distance between lower level and top level
• Complicates planning and control process

2. Organisation with wide span.

Advantages:
1. There are less layers of management to pass a message through, so the message reaches
more employees faster.
2. It requires less money to run a wider span because it doesn’t need as many managers.

Disadvantages:
1. The larger number of employees under one supervisor the more difficult it is to control
activities.
2. The more time the manager spends in one to one contact rather than being proactive to
handle future situations.
3. Managers may make snap decisions as they are looking after too many employees.
4. Manager’s time will be at a premium.
5. Managers will have less time for planning.

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6. Subordinates may make decisions they are not trained to make.

The number of workers under one supervisor is at least 5.

fig.b. wide span.

Q. No : 5 Factors Affecting the Span of Management:

• Ability of the manager: Some managers are more capable than others and hence can
handle a large number of subordinates.
• Ability of the employees: If employees are more competent, less attention from the
managers is required and a larger span of management can be used.
• Type of work: If employees are doing similar jobs, the span of management can be
large. If their jobs are quite different, a small span may be necessary.
• Geographic location: If all subordinates are located at the same place span of
management can be large. If subordinates are geographically distributed, a lower span
is essential.
• Well-defined authority and responsibility: Clear-cut authority and responsibility
helps Manager to supervise large number of subordinates.
• Level of management: The span of management is narrow at higher level of
management, and span can be wider at lower levels.
• Economic considerations: Narrow the span, taller is the structure is more is the cost.
On the other hand, wider span reduces the number of levels and cost.

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