Concept of Organizing

1. Principles of Management CHAPTER-7 Concept of Organizing BY: SHIBA PRASAD DAHAL

2. CONCEPT OF ORGANIZING • Concept Of organizing: • Definition: Organizing is the process of gathering together all activities and resources systematically assigning authority among them with their relation to achieve target goal . • Theo Haiman: “Organizing is the process of defining and grouping the activities of the enterprise and establishing the authority relationship among them.” • Stoner, Freeman and gilbert : “Organizing is the process of arranging and allocating work authority, and resources among organization’s members so that they achieve organization’s goal .” • Conclusion: Organization is the one of the important managerial function identifying the required activities, grouping them into jobs, assigning jobs to various position holders and creating a network of relationship among them for achieving organizational goal. . BY: SHIBA PRASAD DAHAL

3. CONCEPT OF ORGANIZING • ORGANIZING • Organising in a general sense means systematic arrangement of activities. However, organising as a process of management essentially relates to sub-dividing and grouping of activities. Organising becomes necessary when two or more persons work together to achieve some common objectives. When a player is playing alone, no need of organising. But organising becomes important when players are playing in a team. it is important to determine the role of each player and for the team as a whole to attain victory over the rival team. Similarly, in a one-man business, all the activities are performed by the owner himself. But when the owner employs someone to assist him, he has to determine the work to be done by the employee and give him the right to use materials, machinery,equipment, etc.  BY: SHIBA PRASAD DAHAL

4. • The following are the important characteristics of organization • . • Specialization and division of work. The entire philosophy of organization is centered on the concepts of specialization and division of work. The division of work is assigning responsibility for each organizational component to a specific individual or group thereof. It becomes specialization when the responsibility for a specific task lies with a designated expert in that field. • • Orientation towards goals. Every organization has its own purposes and objectives. Organizing is the function employed to achieve the overall goals of the organization. Organization harmonizes the individual goals of the employees with overall objectives of the firm. • • Composition of individuals and groups. Individuals form a group and the groups form an organization. Individuals are grouped into departments and their work is coordinated and directed towards organizational goals. • •Continuity. An organization is a group of people with a defined relationship in which they work together to achieve the goals of that organization. This relationship does not come to end after completing each task. Organization is a never ending process. Purpose of organization BY: SHIBA PRASAD DAHAL

5. • Helps to achieve organizational goal. Organization is employed to achieve the overall objectives of business firms. Organization focuses attention of individuals objectives towards overall objectives. • Optimum use of resources. To make optimum use of resources such as men, material, money, machine and method, it is necessary to design an organization properly. Work should be divided and right people should be given right jobs to reduce the wastage of resources in an organization. • To perform managerial function. Planning, Organizing, Staffing, Directing and Controlling cannot be implemented without proper organization. • Facilitates growth and diversification. A good organization structure is essential for expanding business activity. Organization structure determines the input resources needed for expansion of a business activity similarly organization is essential for product diversification such as establishing a new product line. • Humane treatment of employees. Organization has to operate for the betterment of employees and must not encourage monotony of work due to higher degree of specialization. Now, organization has adapted the modern concept of systems approach based on human relations and it discards the traditional productivity and specialization approach.  BY: SHIBA PRASAD DAHAL

6. CONCEPT OF ORGANIZING BY: SHIBA PRASAD DAHAL

7. Importance of organizing The following are the importance of organizing: • Specialization: Organizational structure is a network of relationships in which the work is divided into units and departments. This division of work is helping in bringing specialization in various activities of concern. • Well defined job: Organizational structure helps in putting right man on right job which can be done by selecting people for various department according to their qualification, skill and experience This is helping in defining the jobs properly which clarified the role of every person. • Clarifies authority: Organizational structure helps in clarifying the role positions to every manager. This can be done by clarifying the power to every managers and the way he has to exercise those power should be clarified so that misuse of power do not take place. • Coordination: Organization is the means of creating coordination among different departments of the enterprise. It creates clear cut relationships among positions and ensures mutual cooperation between individuals and groups. • Effective administration: The organization structure is helpful in defining the job positions. The roles to be performed by different managers are classified. Specialization is achieved through division of work. This all leads to effective and efficient administration. • Growth and diversification: Organizing helps in determining the effective and efficient framework, which facilitates coordination between authority and responsibility and concentrating on specialization. This enables the organization in capacity building and increases their level of activities. • Scope of new changes: As the role of each individuals and groups are clear, along with their authority and responsibility, they can take decisions independently to adopt in changing environment. This may bring new changes into the running of an organization. BY: SHIBA PRASAD DAHAL

8. Organizing • Principles of Organizing • Organizing is one of the major functions of management. It is performed by all mangers and it is a continuous process. The principle of organizing has to do with the grouping of organizational activities into various units and dividing responsibility and authority accordingly. Some of the widely practiced principles are as follows: • 1.Objective: An objective is an end or goal to be achieved. The goals and objectives must be clearly defined for the entire organization for each department and even for each position in the organization structure. Once the objectives have been clearly defined, organizing function become easier. • 2. Specialization or division of Labor: The concept of division of work is based on the principle of specialization and efficiency. Specialization helps to break down overall task of organization ad divide it into the smaller component parts. Greater output can be obtained when each person concentrates on doing the thing for which he/she is best qualified. • 3. Span of control: Span of control represents a numerical limit of subordinates to be supervised or controlled by a manger. It is believed that organizational efficiency is increased by limiting the span of control at any point in the hierarchy to a small number. BY: SHIBA PRASAD DAHAL

9. Organizing • Principles of Organizing • 4.Scalar Chain: The chain of supervisors ranging from the top management to the lowest rank managers should be clearly defined. The chain of command should be short and clear which makes decision making and communication more effective. • 5.Unity of Command: In organizing activities, it is better when an employee receives orders from only one supervisor. Direction from several superiors may result in confusion, chaos, conflict and indiscipline. • 6.Delegation of authority: Proper authority should be delegated at all level of management. The authority delegated should be equal to responsibility so as to enable each manager to accomplish the task assign to him/her. • 7.Responsibility: Once authority is given, managers have to be responsible for their actions. They are also responsible for the action of their subordinates. • 8.Efficiency: The organization structure should enable to function efficiently and accomplish organizational goals/ objectives with the lowest possible cost. Hence it should ensure optimum utilization of all resources. • 9.Simplicity: The organization should be kept as simple as possible. A complex organization means difficulty of communication and coordination. BY: SHIBA PRASAD DAHAL

10. Organizing • Principles of Organizing • 10.Flexibility: Since, external environment always changes, it is necessary to cope up with the changing environment. Organizational structure should be flexible enough to cope up with the changes in the external environment. • 11.Balance: There should be a reasonable balance in the size of various departments and between centralization and decentralization. Imbalances creates problem to achieve its goals for an organization in an effective and efficient way. • 12.Unity of Direction: There should be one objective and one plan for a group of activities having the same objective. A boss with many objectives will create chaos. Thus unity of direction facilitates verification and coordination of activities. • 13.Staffing: Staffing principle focuses on employing, rewarding and developing people in the organization to motivate them in order to work in the direction to achieve organizational goals. BY: SHIBA PRASAD DAHAL

11. Organizing • Approaches to Organizing • The Approaches to organizing have considerable influence on organizing thought and practice. Some of these approaches are as follows: • 1. Classical Approach: • F.W. Taylor, Henry Fayol, and Max Weber, were major contributors to the classic approach to organizational design. Though, their prescriptions and approaches to organizing are different, they all advocate ”universal principles” of organizing. They attempt to specify the “one best way” to organizing. • F.W. Taylor believed that the key to organizing is to scientifically design the job. Taylor’s ideas on organizing are as follows: • a. Scientific approach to work by determining optimal workload laid by breaking down the job into smaller components. • b. Incentive for reward by designing incentive system in which the workers receive more pay for more output. • c. Separation of planning from performance by dividing work between management and workers. Management should undertake planning, standard setting, and supervising activities. Workers, on the other-hand, should concentrate on physical and operational aspects of the jobs. BY: SHIBA PRASAD DAHAL

12. Approaches to Organizing • Max Weber is remembered for his work on bureaucracy. The bureaucratic organization has to the following components. • a. Hierarchy: Jobs are highly specialized and arranged in a hierarchy. • b. Rules and regulations: All tasks are performed according to predetermined rules and procedures. • c. Authority levels: Each job has some jurisdiction. Employees exercise authority in performing their jobs. • d. Impersonality: Impersonality in performing the task is extremely important. The supervisors must maintain social distance from subordinates. • e. Technical qualification and career orientation: Employment and promotion are based on technical qualification and achievement. Therefore, seniority is the main factor in promotion. Similarly, Henry Fayol main principles of organizing are: • a. Unity of command • b. Scalar chain • c. Authority and responsibility • d. Unity of Direction • His assumptions were that, good management is able to motivate workers to perform according to management guidelines and expectation. If worker fail to produce the fault lies with management. Thus, he developed fourteen principles to make manger aware of their responsibilities and better at executing them. BY: SHIBA PRASAD DAHAL

13. Decision Making BY: SHIBA PRASAD DAHAL

14. Decision Making Problems, Decision Types, and Organizational Levels BY: SHIBA PRASAD DAHAL

15. Decision Making • Problem Solving • Problem solving is an intellectual process to get actual situation closer to desired situation. • Managerial problem solving consists of following four steps. • Identifying the problem • Generating alternative solutions • Selecting a best solution • Implementing & evaluation of problem. • Managers may face problems in the stage of planning, Organizing, leading & controlling. BY: SHIBA PRASAD DAHAL

16. Programmed Decisions Nonprogrammed Decisions Types of problems Repetitive, routine, frequent; decisions made according to specific procedures Novel, complex, difficult, infrequent; decisions require original thinking Proce-dures Depend on policies and rules Require creativity, intuition, tolerance for ambiguity Examples Business firm: Periodic reorders of inventory Health care: Procedure for admitting patients University: Necessary GPA for good academic standing Business firm: Diversification into new products and markets Health care: Purchase of experimental equipment University: Construction of new classrooms Programmed and Nonprogrammed Decisions: A Comparison 6.2 BY: SHIBA PRASAD DAHAL

17. “What really, really is our problem?” “Let’s dream up some great ideas.” “Some of these ideas are good; others are wacko.” Identify and diagnose the problem Develop creative alternatives Evaluate the alternative solutions “How really good was that idea?” “Now let’s take action.” “This alternative is a winner!” Evaluate and control Implement the decision Choose one alternative solution Steps in Problem Solvingand Decision Making 6.3 BY: SHIBA PRASAD DAHAL

18. 1. Have a specific agenda and adhere to it 2. Rely on qualified group members 5. Build consensus so the decision is more likely to be implemented 4. Provide summaries for each major point 3. Have the leader share decision-making authority Suggestions for Improving Group Problem-Solving BY: SHIBA PRASAD DAHAL

19. 1. Keep an idea notebook 2. Stay current in your field 3. Listen to other people 4. Learn to think in the five senses 5. Improve your sense of humor 6. Adopt a risk-taking attitude 7. Develop a creative mental set 8. Identify your most creative times 9. Be curious about your environment 10. Step back when faced with a creativity block Suggestions to Build Creativity BY: SHIBA PRASAD DAHAL

20. Types of Problem • Frequency /Structures of the problems • Well structured Problems: Straight Forward, Clear goals related decision used to solving repetitive and routine problem. Refer guideline, procedures, rules, policies etc. while solving problems. • Poorly Structured Problems: Such problems are new or unusual, unclear & incomplete information, Such problem can not refer guideline, procedures, rules, policies etc. while making decisions. • Urgency Of Problem: • Urgent Problems • Non Urgent Problems • Impact of Problem: • Over all impact problems • Partial Impact Problems • Sources of Problems • Technical Problems • Human Problems BY: SHIBA PRASAD DAHAL

21. Problem Solving Strategy BY: SHIBA PRASAD DAHAL

22. Techniques of group decision making • BRAINSTORMING: It is a techniques of group decision making in which individuals generate ideas in the form of free discussion and understanding. Under this techniques, a group is gathered presented with the problem &encourage to produce many ideas and solutions as they can. • Delphi Technique: This techniques involves the solicitation & comparison of anonymous judgement on the topics of interest through a set of sequential set of questionnaires. In this techniques a group of professional who are experts in their own sector of knowledge are gathered and they are asked to give their opinions about the problems. • Nominal Group Techniques: This techniques is very similar to Brainstorming techniques. It is a structured technique used to generate creative and innovative ideas. This techniques is similar to traditional committee meetings, except members work independently & they generate idea solving the problem in writing silently. BY: SHIBA PRASAD DAHAL

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25. 1. Small group is assembled 6. Alternatives are rated and best-rated one is chosen 2. Leader presents a problem 5. Group clarifies and evaluates all suggestions 3. Members write down ideas individually 4. Each participant presents one idea to group NOMINAL GROUP DECISION Technique BY: SHIBA PRASAD DAHAL

26. Advantages and Disadvantages of group decision making BY: SHIBA PRASAD DAHAL

27. Definition Management By Objectives (MBO) • Definition Management By Objectives (MBO) can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. • Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are in the organization. • The term "management by objectives" was first popularized by Peter Drucker in his 1954 book 'The Practice of Management. BY: SHIBA PRASAD DAHAL

28. Main Concept • The principle behind Management by Objectives (MBO) is to make sure that everybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. • • The complete MBO system is to get managers and empowered employees acting to implement and achieve their plans, which automatically achieve those of the organization. • Preparing of organizational vision, goals and objectives • Specific objectives for each member • Participative decision making • Explicit time period • Performance evaluation and feedback BY: SHIBA PRASAD DAHAL

29. MBO Strategy: • Three Basic Parts • • All individuals within an organization are assigned a special set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers. • Performance reviews are conducted periodically to determine how close individuals are to attaining their objectives. • Rewards are given to individuals on the basis of how close they come to reaching their goals BY: SHIBA PRASAD DAHAL

30. The MBO Process BY: SHIBA PRASAD DAHAL

31. Balance Between Management and Employee Empowerment • The balance between management and employee empowerment has to be struck, not by thinkers, but by practicing managers. Turning their aims into successful actions, forces managers to master five basic operations: • setting objectives • organizing the group • motivating and communicating • measuring performance and • developing people BY: SHIBA PRASAD DAHAL

32. MBO: Key Advantages and Disadvantages • Advantages • • MBO programs continually emphasize what should be done in an organization to achieve organizational goals. • MBO process secures employee commitment to attaining organizational goals. • Disadvantages • The development of objectives can be time consuming, leaving both managers and employees less time in which to do their actual work. BY: SHIBA PRASAD DAHAL

33. Factors for successful MBO • Thedynamic nature of the environment: •  In which the business operates. The environment is never static but dynamic and, therefore, any change in it requires changes in the policies and programmes of the business, i.e., the management should be adaptable to changes or else it will be out of existence very soon. M.B.O. is suitable for activities that are not reflective but where changes are desired to accomplish the goals. • The change in the objective of business: • Profit maximization to growth and survival’ has necessitated that the objective can be better accomplished if M.B.O. is practiced, which aims at better utilization of material, human and physical resources of the organization. • The realization of the fact that the aspirations of the individuals should be fulfilled or satisfied if the best is to be drawn out from them. The M.B.O. ensures accommodation of organization objectives with those of the individual objectives. BY: SHIBA PRASAD DAHAL

34. Cont…Factors for successful MBO • Current Thinking • The current thinking that the appraisal of the personnel against the set objectives and in which the person concerned has participated is a more reliable and positive assessment, for it leads to the improvement in the performance of the person concerned. • The development of the concept of corporate planning, • which is concerned with the top management largely because it requires ability, experience, and need for maintaining secrecy and information, though M.B.O. is concerned with all levels of management by involving everyone in fixing the goals of the organization. • M.B.O. has been the result of various supportive concepts, such as Maslow’s hierarchy of needs; McGregor’s Theory of Motivation (Theory X and Theory Y); and Herzberg’s Hygiene Theory. These theories have played an important role in the development of the M.B.O. concept, since they recognize that desire of most managers is to satisfy their higher level needs on the job and to assume responsibility. Managements are achievement-oriented and desire a degree of control over their jobs. BY: SHIBA PRASAD DAHAL

35. Factors for successful MBO SUMMARY BY: SHIBA PRASAD DAHAL

36. THANK YOU BY: SHIBA PRASAD DAHAL