Unit 2 Organization and Staffing
Unit 2 Organization and Staffing
• Unity of Direction
• Simplicity
• Efficiency
• Authority
• Responsibility
• Acceptability
• Flexibility
• Balance
Types of organization
Line organization
Staff organization
Line and staff organization
Committee organization
Matrix organization
Line organization
Line organization
• Simplest form
• Authority flows from
top to bottom vertically
•Direction to subordinates
to be given by immediate
supervisor (no skipping)
•Startup enterprise/small
businesses usually follow
this type of organization
Line Organization
Key Advantages Key Disadvantages
• Functional
• Product
• Territory & Geographical
• Process
• Customer
• Time
FUNCTIONAL DEPARTMENTATION
Example 1 Example 2
PRODUCT DEPARTMENTATION
Key Advantages Key Disadvantages
Continuous and undivided There is duplication of staff and
attention to product facilities. Sales force is maintained
for each product lines. More
number of managers needed as
well
Enables top management to
compare performance of different
products and make appropriate
investment decisions
Better Accountability (managers
are motivated)
Better Performance Evaluation
TERRITORIAL / GEOGRAPHICAL
DEPARTMENTATION
• When several marketing or production
units of an organization are
geographically dispersed in various
locations, it is logical to departmentalize
those units on a geographical basis
• •E.g. Hotel Chain, Banking , Insurance ,
Transportation companies (Railways)
TERRITORIAL / GEOGRAPHICAL
DEPARTMENTATION
Key Advantages Key Disadvantages
Motivates each regional head to Gives rise to duplication of
achieve high performance various activities
Regional head can adapt to his Regional units may be engrossed
local situation and customer need in competition (may forget overall
with speed and accuracy. interest of the organization)
Advantage of locational factors
(raw material, labor etc.)
Valuable top management training
and experience to middle level
executives
Enables comparison on regional
basis
TERRITORIAL / GEOGRAPHICAL
DEPARTMENTATION
PROCESS DEPARTMENTATION
• In process departmentation, process
involved in production or various
type of equipments used are taken as
basis for departmentation
• Various processes can be used as the
base of grouping of activities
PROCESS DEPARTMENTATION
PROCESS DEPARTMENTATION
Key Advantages Key Disadvantages
Facilitates efficient use of Workers are focused on their
equipments process area
• Decentralization
• Difficulty in Selection of Managers
• Difficulty in Managerial Training
• Uneconomical System
• Not Suitable for Small Enterprises
SPAN OF CONTROL
• What is the Span of Control?
–The number of people who report to one
manager in a hierarchy
–The more people under the control of one
manager - the wider the span of control
–Less means a narrower span of control
• Example below shows a span of control of 4
for the Marketing Manager
SPAN OF CONTROL
FACTORS AFFECTING SPAN OF
MANAGEMENT
• Ability of the Manager
• Ability of the Employees
• Type of Work
• Well Defined Authority and Responsibility
• Sophisticated Information & Control System
• Geographic Location
• Levels of Management
• Economic Considerations
FACTORS AFFECTING SPAN OF
MANAGEMENT
V. A. GRAICUNAS made significant
contribution to span of management theory
• Direct One to One Relationships
• Direct group relationships
• Cross relationships
Types of Span of Control
• Wide Span of Control (Flat Organization - large
number of employees reporting to one supervisor)
• Narrow Span of Control (Tall organization – a small
number of employees report to a supervisor,
necessitating a larger number of supervisors)
WIDE SPAN AND NARROW SPAN
OF CONTROL
WIDE SPAN OF CONTROL (FLAT
ORGANIZATION)
Key Advantages Key Disadvantages
• Delay in work
• Remote control
• No special attention
• Problem of Communication
• Excessive work load for top executives
CHARACTERICS OF DECENTRALIZATION
• Setting Objectives
• Tracking Progress
• Evaluating Results
MANAGEMENT BY OBJECTIVES (MBO)
SCREENING INTERVIEW
• The HR department tries to screen out the obvious misfits through this
courtesy interview. A prescribed application form is given to candidates
who are found to be suitable.
APPLICATION BANK