Chapter 10 – Organizing as a Management Function
• Organizing arranges people and resources to work toward a goal. As one of the basic
functions of management, it involves both creating a division of labour for tasks to be
performed and then coordinating results to achieve a common purpose.
• Organization Structure is a system of tasks, reporting relationships, and communication
linkages. Any structure should both allocate tasks through a division of labour and provide
for the coordination of performance results. A structure that does both of these things well is
an important asset, helping to implement an organization’s strategy.
• An organization chart describes the arrangement of work positions within an organization.
A typical organization chart identifies various positions and job titles as well as the lines of
authority and communication between them.
• A formal structure is the official structure of the organization. It represents the way the
organization is intended to function. Basics of an organization chart includes:
1. Division of work: positions and titles show work responsibilities.
2. Supervisory relationships: lines show who reports to whom.
3. Communication channels: lines show formal communication flows.
4. Major subunits: positions reporting to a common manager are shown.
5. Levels of management: vertical layers of management are shown.
• Informal structure is the set of unofficial relationships among an organization’s members.
If the informal structure could be drawn, it would show who talks to and interacts regularly
with whom regardless of their formal titles and relationships. Informal structures can be
very helpful in getting work accomplished.
Departmentalization is the process of grouping together people and jobs into work units. These
decisions have traditionally resulted in three major types of organizational structures – the
functional, divisional, and matrix structures.
www.notesolution.com Functional Structures
• A functional structure groups together people with similar skills who perform similar
• Advantages of a functional structure include the following:
1. Economies of scale with efficient use of resources
2. Task assignments consistent with expertise and training
3. High-quality technical problem solving
4. In-depth training and skill development within functions
5. Clear career paths within functions
• The functional chimneys problem is a lack of communication and coordination across
functions. (A disadvantage for functional structure)
• A divisional structure groups together people working on the same product, in the same area,
with similar customers, or on the same processes.
• Advantages of a divisional structure include the following:
1. More flexibility in responding to environmental changes
2. Improved coordination across functional departments
3. Clear points of responsibility for product or service delivery
4. Expertise focused on specific customers, products, and regions
5. Greater ease in changing size by adding or deleting divisions
• A product structure groups’ together people and jobs related to a single product or service.
They clearly identify costs, profits, problems, and successes in a market area with a central
point of accountability, also known as market structure.
• A geographical structure groups’ together people and jobs performed in the same location.
They are typically used when there is a need to differentiate products or services in various
locations, such as in different regions of a country.
• A customer structure groups together people and jobs that serve the same customers and
www.notesolution.com clients. The major appeal is the ability to best serve the special needs of the different
• A process structure groups jobs and activities that are part of the same processes. A work
process is a group of tasks related to one another that collectively cre