BATANGAS STATE UNIVERSITY

The National Engineering University

COLLEGE OF ENGINEERING
Alangilan Campus

Module 6
Function of
Management:
Organizing
Learning Outcomes

➢ Analyze the different forms of organization.

➢ Explain the different organizational structures.

➢ The engineer manager needs to acquire various skills in
management, including those for organizing technical
activities.

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➢ In this highly competitive environment, the unskilled
manager will not be able to bring his unit, or his company,
as the case may be, to success.
➢ The value of a superior organizational set-up has been
proven dramatically during the Second World War when a
smaller American naval force confronted the tough
Japanese navy at Midway Military.

➢ Historians indicated that the Americans emerged victorious

because of the superior organizational skills of their
leaders.
➢ Even today, skills in organizing contribute largely to the
accomplishment of the objectives of many organizations,
whether they are private businesses or otherwise.
➢ The positive effects of business success becomes more
pronounced when they come as a result of international
operations.
➢ International businesses, however, cannot hope to make
huge profits unless they are properly organized to
implement their plans.
➢ The opportunities offered by skillful organizing are too
important for the engineer manager to ignore.

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Reasons for Organizing

➢ Organizing is undertaken to facilitate the implementation

of plans.

➢ In effective organizing, steps are undertaken to breakdown

the total job into more manageable man-size jobs.

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➢ Doing this will make it possible to assign particular tasks to
particular person.

➢ In turn, these will facilitate the assignment of authority,

responsibility, and accountability for certain functions and
tasks.
What is ORGANIZING?

➢ a management function which refers to “the structuring of

resources and activities to accomplish objectives in an
efficient and effective manner.”

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➢ Weihrich and Koontz believe that people “will work
together most effectively if they know the parts they are to
play in any team operation and how their roles relate to one
another. . . . Designing and maintaining these systems of
roles is basically the managerial function of organizing.”
They continue:
➢ For an organizational role to exist and be meaningful to
people, it must incorporate
(1) verifiable objectives, which . . . are a major part of
planning;
(2) a clear idea of the major duties or activities involved; and
(3) an understood area of discretion or authority, so that
the person filling the role knows what he or she can do to
accomplish goals.
➢ In addition, to make a role work out effectively, provision
should be made for supplying needed information and
other tools necessary for performance in that role.
➢ It is in this sense that we think of organizing as
(1) the identification and classification of required
activities,
(2) the grouping of activities necessary to attain objectives,
(3) the assignment of each grouping to a manager with
the authority (delegation) necessary to supervise it, and
(4) the provision for coordination horizontally (on the same
or similar organizational level) and vertically (for example,
corporate headquarters, division, and department) in the
organization structure.
➢ The arrangement or relationship of positions within an
organization is called the structure.

➢ The result of the organizing process is the structure.

The Purpose of the STRUCTURE

1. It defines the relationships between tasks and authority

for individuals and departments.

2. It defines formal reporting relationships, the number of

levels in the hierarchy of the organization, and the span of
control.
3. It defines the groupings of individuals into departments
and departments into organization.

4. It defines the system to effect coordination of effort in

both vertical (authority) and horizontal (tasks) directions.
When structuring an organization, the engineer manager
must be concerned with the following:

➢ Division of labor
➢ Delegation of authority
➢ Departmentation
➢ Span of control
➢ Coordination
1. Division of labor
➢ determining the scope of work and how it is combined
in a job.
2. Delegation of authority
➢ the process of assigning various degrees of decision-
making authority to subordinates.
3. Departmentation
➢ the grouping of related jobs, activities, or processes
into major organizational subunits.
4. Span of control
➢ the number of people who report directly to a given
manager.
5. Coordination
➢ the linking of activities in the organization that serves
to achieve a common goal or objective.
The FORMAL ORGANIZATION
After a plan is adapted, management will proceed to form
an organization to carry out the activities indicated in the
plan.
➢ The formal organization is “the structure that details
lines of responsibilities, authority, and position.”
➢ What is depicted in the organization chart is the formal
organization.

➢ It is “the planned structure” and it “represents the deliberate

attempt to establish patterned relationships among
components that will meet the objectives effectively.”
➢ The formal structure is described by management
through:

1. organization chart

2. organizational manual and

3. policy manuals.
➢ The organization chart is a diagram of the organization's
official positions and formal lines of authority.
➢ The organizational manual provides written descriptions of
authority relationships, details the functions of major
organizational units, and describes job procedures.
➢ The policy manual describes personnel activities and
company policies.
➢ Formal organizations require the formation of formal
groups which will be assigned to perform specific tasks
aimed at achieving organizational objectives.

➢ The formal group is a part of the organization structure.

INFORMAL GROUPS

➢ There are instances when members of an organization

spontaneously form a group with friendship as a principal
reason for belonging.

➢ This group is called an informal group.

➢ It is not a part of the formal organization and it does not

have a formal performance purpose.
➢ Informal groups are oftentimes very useful in the
accomplishment of major tasks, especially if these tasks
conform with the expectations of the members of the
informal group
➢ The informal organization, useful as it is, is “vulnerable
to expediency, manipulation, and opportunism,”
according to Valentine.
➢ “Its low visibility makes it difficult for management to
detect these misrepresentations, and considerable harm
can be done to the company” according to Valentine.
➢ The engineer manager is, therefore, warned that he must
be on the lookout for the possible difficulties that the
informal groups may do to the organization.

➢ It will be to his best interest if he could make the informal

groups work for the organization.
Reasons or Factors for Joining or Forming a Group
Types of Organizational Structures

➢ Before the commencement of activities, the decision makers

in an organization will have to decide on what structure to
adapt.

➢ Depending on the size and type of operations, a certain

structural type may best fit the requirements.

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1. Functional
organization
➢ this is a form of
departmentalization
in which everyone
engaged in one
functional activity,
such as engineering
or marketing, is
grouped into one
unit.

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2. Product or market
organization
➢ this refers to the
organization of a
company by divisions
that brings together
all those involved
with a certain type of
product or customer.
3. Matrix organization
➢ an organizational structure in which each employee reports to
both a functional or division manager and to a project or group
manager.

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Functional Organization
➢ Functional organization structures are very effective in
smaller firms, especially “single-business firms where key
activities revolve around well-defined skills and areas of
specialization”.
Advantages of Functional Organization

1. The grouping of employees who perform a common task

permit economies of scale and efficient resource use.
Advantages of Functional Organization

2. Since the chain of command meets at the top of the

organization, decision-making is centralized, providing a
unified direction from the top.
Advantages of Functional Organization

3. Communication and coordination among employees within

each department are excellent.

4. The structure promotes high-quality technical problem-

solving.
5. The organization is provided with in depth skill specialization
and development.

6. Employees are provided with career progress within

functional departments.
Disadvantages of Functional Organization

1. Communication and coordination between the departments

are often poor.

2. Decisions involving more than one department pile up at the

top management level and are often delayed.
Disadvantages of Functional Organization

3. Work specialization and division of labor, which are stressed in

a functional organization, produce routine, non-motivating
employee tasks.

4. It is difficult to identify which section or group is responsible for

certain problems.
5. There is limited view of organizational goals by employees.

6. There is limited general management training for employees

Product or Market Organization
➢ The product or market organization, with its feature of
operating by divisions, is “appropriate for a large corporation
with many product lines in several related industries.”
Advantages of Product or Market Organization
1. The organization is flexible and responsive to change.

2. The organization provides a high concern for customer's

needs
3. The organization provides excellent coordination across
functional departments.

4. There is easy pinpointing of responsibility for product

problems.
5. There is emphasis on overall product and division goals.

6. The opportunity for the development of general

management skills
Disadvantages of a Product or Market Organization

1. There is a high possibility of duplication of resources across

divisions.

2. There is less technical depth and specialization in divisions.

3. There is poor coordination across divisions.

4. There is less top management control.

5. There is competition for corporate resources.

Matrix Organization
 THE PLANNING PROCESS
➢ A matrix organization, according to Thompson and Strickland,
“is a structure with two (or more) channels of command, two lines
of budget authority, and two sources of performance and reward.”
➢ Higgins declared that “the matrix structure was designed to
keep employees in a central pool and to allocate them to
various projects in the firm according to the length of time they
were needed.”
Advantages of Matrix Organization

1. There is more efficient use of resources than the divisional

structure.

2. There is flexibility and adaptability to changing environment.

3. The development of both general and functional
management skills are present.

4. There is interdisciplinary cooperation and any expertise is

available to all divisions.
5. There are enlarged tasks for employees which motivate them
better
Disadvantages of Matrix Organization

1. There is frustration and confusion from dual chain of

command.

2. There is high conflict between divisional and functional

interests.

3. There are many meetings and more discussion than action.

4. There is a need for human relations training for key
employees and managers.

5. There is a tendency for power dominance by one side of the

matrix.
Types of AUTHORITY

1. Line authority
➢ a manager's
right to tell
subordinates
what to do and
then see that
they do it.
2. Staff authority
➢ a staff specialist's
right to give
advice to a
superior
3. Functional
Authority
➢ A specialist’s
right to oversee
lower level
personnel
involved in that
specialty,
regardless of
where the
personnel are in
the organization.
➢ LINE DEPARTMENTS performs tasks that reflect the
organization’s primary goal and mission.
➢ STAFF DEPARTMENTS include all those that provide
specialized skills in support of line departments.

Examples :
➢ those which perform strategic planning, labor relations,
research, accounting and personnel.
Staff officers may be classified as:

1. Personnel Staff

➢ Those individuals assigned to a specific manager to provide

needed staff and services.
2. Specialized Staff

➢ Those individuals providing needed staff services for the

whole organization.
➢ FUNCTIONAL AUTHORITY is one given to a person or a
work group to make decisions related to their expertise even
if these decisions concern other departments.

➢ This authority is given to most budget officers of

organizations, as well as other officers.
Line and Staff Organization
➢ ACTIVITY
➢ DEVELOP AN ORGANIZATIONAL STRUCTURE FOR:
➢ MANUCATURING FIRM
➢ SERVICES FIRM

➢ Reminder: determine first the different activities in the

organization
The Purpose of COMMITTEE

➢ When certain formal groups are deemed inappropriate to meet

expectations, committees are oftentimes harnessed to achieve
organizational goals.

➢ Many organizations, small or large, make use of committees.

A COMMITTEE is a formal group of persons formed for a
specific purpose.

Product Planning committee

➢ often staffed by top executives from marketing, production,
research, engineering, and finance who work part time to
evaluate and approve product lines - Millevo
➢ Committees are very useful most especially to engineering
and manufacturing firms.

➢ When a certain concern, like product development, is under

consideration, a committee is usually formed to provide the
necessary line-up of expertise needed to achieve certain
objectives.
Classification of Committees

1. Ad Hoc Committee

One created for a short-term purpose and have a limited life.

Example:
➢ committee created to manage the anniversary festivities of
a certain firm.
2. Standing Committee

➢ It is relatively permanent committee that deals with issues

on an ongoing basis.

Example :
➢ Grievance Committee set up to handle initially complaints
from employees of the organization