BY – COL ALOK KUMAR MHA 2017-19

ASSIGNMENT PROCESS ORGANISATION

Content

  • Introduction
  • Definition of Process Organization
  • Stages or steps in the process of organisation
  • Categorisation of Formal organisational structures
  • The Informal Organisation
  • Departmentalization
  • Delegation of Authority
  • Authority and Responsibility
  • Conclusion
  • Bibliography

PROCESS ORGANIZATION

  1. Introduction. Managers today are enamored of processes. It’s easy to see why. Many modern organizations are functional and hierarchical; they suffer from isolated departments, poor coordination, and limited lateral communication. All too often, work is fragmented and compartmentalized, and managers find it difficult to get things done. Scholars have faced similar problems in their research, struggling to describe organizational functioning in other than static, highly aggregated terms. For real progress to be made, the “proverbial ‘black box,’ the firm, has to be opened and studied from within.” Processes provide a likely solution. In the broadest sense, they can be defined as collections of tasks and activities that together — and only together — transform inputs into outputs. Within organizations, these inputs and outputs can be as varied as materials, information, and people. Common examples of processes include new product development, order fulfillment, and customer service; less obvious but equally legitimate candidates are resource allocation and decision making. Over the years, there have been a number of process theories in the academic literature, but seldom has anyone reviewed them systematically or in an integrated way. Process theories have appeared in organization theory, strategic management, operations management, group dynamics, and studies of managerial behavior. The few scholarly efforts to tackle processes as a collective phenomenon either have been tightly focused theoretical or methodological statements or have focused primarily on a single type of process theory.Yet when the theories are taken together, they provide a powerful lens for understanding organizations and management:
    1. First, processes provide a convenient, intermediate level of analysis. Because they consist of diverse, interlinked tasks, they open up the black box of the firm without exposing analysts to the “part-whole” problems that have plagued earlier research. Past studies have tended to focus on either the trees (individual tasks or activities) or the forest (the organization as a whole); they have not combined the two. A process perspective gives the needed integration, ensuring that the realities of work practice are linked explicitly to the firm’s overall functioning.
    2. Second, a process lens provides new insights into managerial behavior. Most studies have been straightforward descriptions of time allocation, roles, and activity streams, with few attempts to integrate activities into a coherent whole.5 In fact, most past research has highlighted the fragmented quality of managers’ jobs rather than their coherence. A process approach, by contrast, emphasizes the links among activities, showing that seemingly unrelated tasks — a telephone call, a brief hallway conversation, or an unscheduled meeting — are often part of a single, unfolding sequence. From this vantage point, managerial work becomes far more rational and orderly.
  2. Nature of Organisation: Organisation as Process & Organisation as a Structure. Basically, the nature of organisation can be viewed in two ways:
    1. Organisation as a Process: As a process, organisation is an executive function. it becomes a managerial function involving the following activities: Determining activities necessary for the accomplishment of the business objectives, Division of work, Grouping of inter-related activities, Assigning duties to persons with requisite competence, Delegating authority, and Co-ordinating the efforts of different persons and groups. When we consider organisation as a process, it becomes the function of every manager. Organising is a continuous process and goes on throughout the life-time of an enterprise. Whenever there is a change in the circumstances or material change in situation, new type of activities spring up. So, there is a need for constant review and re-assignment of duties. Right persons have to be recruited and necessary training imparted to make them competent to handle the jobs. The process of organisation thus, involves dividing the work in a rational way and integrating the activities with work situations and personnel. It also represents humanistic view of the enterprise since it is the people who are uppermost in the process of integration of activities. Continuous review and adjustment makes it dynamic as well.
    2. Organisation as a structure (or, framework of relationships): As a structure, organisation is a network of internal authority and responsibility relationships. It is the framework of relationships of persons operating at various levels to accomplish common objectives. An organisation structure is a systematic combination of people, functions and physical facilities. It constitutes a formal structure with definite authority and clear responsibility. It has to be first designed for determining the channel of communication and flow of authority and responsibility. For this, different types of analysis have to be done. Peter F Drucker suggests following three types of analysis: Activities analysis, Decision analysis and Relations analysis. A hierarchy has to be built-up i.e., a hierarchy of positions with clearly defined authority and responsibility. The accountability of each functionary has to be specified. Therefore, it has to be put into practice. In a way, organisation can be called a system as well. The main emphasis here is on relationships or structure rather than on persons. The structure once built is not liable to change so soon. This concept of organisation is, thus, a static one. It is also called classical concept. Organisation charts are prepared depicting the relationship of different persons. In an organisation structure, both formal and informal organisations take shape. The former is a pre-planned one and defined by the executive action. The latter is a spontaneous formation, being laid down by the common sentiments, interactions and other interrelated attributes of the people in the organisation. Both formal and informal organisations, thus, have structure.
  3. Process Work vs. Task Work. The advantages of Taylorism and Fordism – or industrialism more in general – were considerable increases in productivity. However, these management theories were characterised by extreme fragmentation of work, ending up in utmost specialised tasks; which Michael Hammer would call “Task Work”. Charlie Chaplin’s Modern Times is a nice illustration of where such work may actually lead to. Apart from the poor human and (intrinsic) motivational aspects, the  main issue is that people executing such “task work” have no concern – and most often are unaware – of what other people in the same organisation are doing. They are ‘only’ supposed to carry out tasks, most often ignoring the broader context of the organisation; let alone the value of their work for the client who will use the product or service to be delivered. Process work, instead, entails external focus – e.g. customer-focus -, is holistic and is outcome-driven. In a Process Organisation, workers know the effects and the impact of their work on the activities by colleagues, and on the final product and service; thus also on the possible effects to the actual customer satisfaction.
  4. Definition of Process Organization. Process organization involves the design of work processes. It involves organizing the way work is broken down in terms of content and space as well as the order in which it is carried out in time and the use of funds and materials. This process design is the foremost task in modern organizational development because it is essentially here that the outcome of the work process is determined. Changing processes in the form, for example, of Business Process Reengineering has been vital in administrative modernization. The changed work organization not only produces gains in efficiency for the organization, but it can also have negative consequences for staff. It may result in “redundancies” or in extension of the range of duties without a concomitant extension in authority. This is frequently associated with a feeling of overload, as new routines for action have to be developed parallel to the work process. Negative effects are mostly felt especially at clerical level, where many women work. A Process Organisation may simply be defined as one that enables and stimulates the execution of “Process Work”. This obviously requires more explanation about “process work”.
  5. Benefits of the Process Organisation. As with Process Work, people have a large(r) understanding of their work – and the meaning and value of it -, they will be much more involved and committed. Hence, they will be even more motivated and disciplined to take colleagues and customers expectations into account. Employees thus will be more intrinsically motivated, what naturally will lead to higher performance. Moreover, less supervising and controlling activities will be needed. Though probably unneeded to mention, such ‘middle management’ activities are often expensive and usually create additional “organisational layers”, which on their turn lead to less effective communication. Hence, additional benefits of the Process Organisation are higher organisational efficiency and effectiveness.
  6. The 14 characteristics. In his document “The Process Enterprise: An Executive Perspective”, Hammer quoted 14 characteristics – say conditions – for an organisation to become or to stay process-oriented:
    1. A common Model of the organisation – in process terms. This model is the ‘big picture’ and represents the organisation’s main processes at a high level, including most important inputs, outputs and dependencies between the processes. You may compare it to an enriched Value Chain (according to Michael Porter), or to a Lean Value Stream Map – at the enterprise level (or even the so called ‘Extended Value Stream Map’). The main purpose of this Model is that any member within the organisation understands how s/he contributes to the overall organisational activities and objectives. See also the previous blogexplaining the importance of process knowledge, leading to higher involvement and motivation.
    2. Process Owners rather than functional managers. Traditional organisation hierarchy, consisting of functional managers are counterproductive in a process organisation, as they often cause (functional) silo’s, leading to inefficiencies and lower performance. Process Owners instead are responsible for (re)design, smooth execution and performance of an entire processes, e.g. from start to end. Their role is also to stimulate all process workers and stakeholders to continuously improve the process.
    3. Process (re-)designs. To achieve objectives and to deliver qualitative, repeatable and predictable output, business processes should be clearly designed (e.g. which activities to perform at what time, by whom, etc.). Organisations with a higher ‘process maturity level’ will also regularly redesign their processes for continuous improvement purposes.
    4. Process teams. Every member of the process team must be aware that their individual work is only successful when integrated with the efforts of their (process) colleagues, so delivering the right output and fulfilling the objectives of the business process. Such process teams are supposed to be ‘cross-functional’, as processes usually flow across functional domains.
    5. Process literacy. In addition to the organisational model (see characteristic (a)), each member of a process team should also understand his/her own process(es), including his/her contribution to the overall quality of the end product or service. Specific process diagrams or Value Stream Maps should be known by any process team member. This implies that process team members must be able to understand process diagrams or value stream maps and that they have to be trained in the basics of process management.
    6. Process Metrics. Process performance and the achievement of process objectives, particularly with a customer-focus cannot lack in the Process Organisation. Every team member should also understand how s/he contributes to this performance, to encourage them to care about the process and its output(s), to create as much as possible value for the customer, but for all stakeholders in general. This means that they also should know the factors impacting the process performance.
    7. Leadership. This is the most important condition or ‘critical success factor’ for a Process Organisation : absolute – and passionate – commitment from the most senior management is really mandatory to become, or to stay, a Process Organisation. Without such a commitment at senior level, any attempt will finally be useless and will rather lead to suboptimisation, since process-orientation will not be consistent in every part of the organisation.
    8. Integration (= holistic or systemic approach). A Process Organisation requires a holistic – say systemic – approach, assuring that relations and dependencies between business processes are known contributions of processes to the overall organisational objectives and strategy are clear. This is also illustrated by this (previous) blog, which explains the importance of ‘translating’ the strategic objectives towards process objectives, down to individual (or team) objectives; so every worker is aware of to which higher organisational goal s/he contributes.
    9. Coaching for optimal capabilities. Nobody will doubt whether people’s capabilities are tremendously important for performing business processes. Hence, skills should be cared of, based on the process design, but also taking personal goals – and individual growth ambition – of employees into account.
    10. Cultural aspects. Senior management should install and cultivate a value system, fostering an organisational culture enhancing responsibility, omitting finger-pointing (e.g. ‘no-blame’) and stressing the importance of customer-focus. Such values will be sustainable only when internalised in the culture; such an internalisation is obviously long-term work and also demands persistence.
    11. Process supporting use of ICT. As a Process Organisation is de facto also a ‘Learning organisation’ (like according to Peter Senge), it should also rely on information & commu nication technology, supporting end-to-end processes beyond departmental – and even across organisational – boundaries. This may be enabled thanks to organisation-wide applications (like ERP, CRM, etc.) – or even inter-organisational software (like SCM). Obviously also less ‘data structured’ systems like Document (DMS) and Content Management Systems (CMS) are recommended to improve organisational knowledge.
    12. Facilities & Work environment. Appropriate facilities obviously catalyse process flow, which means that process teams should be put together (for instance in a same room) wherever possible, rather than located in – isolated – functional departments.
    13. Process enabling Human Resources system(s). Professional growth should be seen as “process careers”, thus learning new skills & disciplines rather than hierarchical (intra functional) growth. Also possible compensation systems should be considered from a process & team perspective, rather than pure individual and departmental rewards (which too often stimulate ego-centric or silo mentality and counterproductive behavior).
    14. Management activities & systems. Typical management activities like budgeting and planning should also be process-centered rather than departmental.
  7. Gender Mainstreaming. Process optimization often results in the creation of jobs with low scope for independent action (support division) which are then mostly allocated to women. These jobs offer little scope for further qualification and promotion. Women may furthermore, because of gender stereotyping, not be adequately involved in the development of new information technology networks. This results in hardening of gender-specific discrimination and insufficient consideration in knowledge management of the informal knowledge existing in functional areas in which predominantly women are employed. Organizational development geared to gender equality is aware of these dangers and systematically integrates gender aspects into its process organization. Balanced consideration of all relevant differences results on the one hand in staff being addressed as individuals, so that disappointments and the resulting loss of motivation can be avoided; and on the other hand, the organization thus has all available knowledge resources for process optimization at its disposal. Moreover, it is a good idea to link the implementation of Gender Mainstreaming strategically with the reorganization of processes. For successful implementation, corresponding knowledge and information management is vital. Gender-sensitive process organization thus aims at a work organization that enables individual needs such as family responsibilities and the organization’s operational requirements to be harmonized in a much more balanced way than hitherto.
  8. Stages or steps in the process of organisation. The stages or steps in the process of organisation are explained below:-
    1. Fixing the objectives of the organisation. At the top level, administrative management first fixes the common objectives of organisation. At the middle level, executive management fix the departmental objectives. Lastly, at the lower level, supervisory management fix the day-to-day objectives. All the objectives of the organisation must be specific and realistic.
    2. Finding activities must for achieving objectives. After fixing the objectives, the top-level management prepares a list of different activities (or works) which are required to be carried out for achieving these objectives. This list is prepared at random without following any sequence or order. This is a very important step because it helps to avoid duplication, overlapping and wastage of efforts.
    3. Grouping the similar activities. All similar or related activities having a common purpose are grouped together to make departments. For e.g. all activities or works which are directly or indirectly connected with purchasing are grouped together to make the Purchase Department. So various departments such as Purchase, Production, Marketing, Finance, etc. are made. The grouping of similar activities leads to division of labour and specialisation.
    4. Defining responsibilities of each employee. The responsibilities (duties) of each employee are clearly defined. This will result in the selection of a right person for the right post / job. He / she will know exactly what to do and what not to do. Therefore, it will result in efficiency.
    5. Delegating authority to employees. Each employee is delegated (surrender or given) authority. Without authority, the employees cannot carry out their responsibilities. Authority is the right to give orders and the power to get obedience. The authority given to an employee should be equal to the responsibility given to him.
    6. Defining authority relationship. When two or more persons work together for a common goal, it becomes necessary to clearly define the authority relationship between them. Each person should know who is his superior, from who he should take orders, and to whom he will be answerable. Similarly, each superior should know what authority he has over his subordinates.
    7. Providing employees all required resources. After defining the authority relationships, the employees are provided with all the material and financial resources, which are required for achieving the objectives of the organisation. So in this step, the employees actually start working for a common goal.
    8. Coordinating efforts of all to achieve goals. This is the last stage or step in the process of organisation. Here, the efforts of all the individuals, groups, departments, etc. are brought together and co-coordinated towards the common objectives of the organisation.
  9. Formal and Informal Organizations. All managers must bear that there are two organisations they must deal with-one formal and the other informal. The formal organisation in usually delineated by an organisational chart and job descriptions. The official reporting relationships are clearly known to every manager. Alongside the formal organisation exists are informal organisation which is a set of evolving relationships and patterns of human interaction within an organisation that are not officially prescribed.
  10. Categorisation of Formal organisational structures. Formal organisational structures are categorised as:
    1. Line organisational structure. A line organisation has only direct, vertical relationships between different levels in the firm. There are only line departments-departments directly involved in accomplishing the primary goal of the organisation. For example, in a typical firm, line departments include production and marketing. In a line organisation authority follows the chain of command.
      1. Features: Has only direct vertical relationships between different levels in the firm.
      2. Advantages: A line structure tends to simplify and clarify responsibility, authority and accountability relationships. The levels of responsibility and authority are likely to be precise and understandable. A line structure promotes fast decision making and flexibility. Because line organisations are usually small, managements and employees have greater closeness.
      3. Disadvantages: As the firm grows larger, line organisation becomes more ineffective. Improved speed and flexibility may not offset the lack of specialized knowledge. Managers may have to become experts in too many fields. There is a tendency to become overly dependent on the few key people who can perform numerous jobs.
    2. Staff or Functional Authority Organisational Structure. The jobs or positions in an organisation can be categorized as: Line position (a position in the direct chain of command that is responsible for the achievement of an organisation’s goals) and Staff position (A position intended to provide expertise, advice and support for the line positions). The line officers or managers have the direct authority (known as line authority) to be exercised by them to achieve the organisational goals. The staff officers or managers have staff authority (i.e., authority to advice the line) over the line. This is also known as functional authority. An organisation where staff departments have authority over line personnel in narrow areas of specialization is known as functional authority organisation. In the line organisation, the line managers cannot be experts in all the functions they are required to perform. But in the functional authority organisation, staff personnel who are specialists in some fields are given functional authority (The right of staff specialists to issue orders in their own names in designated areas). The principle of unity of command is violated when functional authority exists i.e., a worker or a group of workers may have to receive instructions or orders from the line supervisor as well as the staff specialist which may result in confusion and the conflicting orders from multiple sources may lead to increased ineffectiveness. Some staff specialists may exert direct authority over the line personnel, rather than exert advice authority (for example, quality control inspector may direct the worker as well as advise in matters related to quality). While this type of organisational structure overcomes the disadvantages of a pure line organisaional structure, it has some major disadvantages. They are: the potential conflicts resulting from violation of principle of unity of command and the tendency to keep authority centralized at higher levels in the organisation.
    3. Line and Staff Organisational Structure: Most large organisations belong to this type of organisational structure. These organisations have direct, vertical relationships between different levels and also specialists responsible for advising and assisting line managers. Such organisations have both line and staff departments. Staff departments provide line people with advice and assistance in specialized areas (for example, quality control advising production department).In the line and staff organisational chart, the line functions are production and marketing whereas the staff functions include personnel, quality control, research and development, finance, accounting etc. The staff authority of functional authority organisational structure is replaced by staff responsibility so that the principle of unity of command is not violated. Three types of specialized staffs can be identified: Advising, Service and Control. Some staffs perform only one of these functions but some may perform two or all the three functions. The primary advantage is the use of expertise of staff specialists by the line personnel. The span of control of line managers can be increased because they are relieved of many functions which the staff people perform to assist the line. Disadvantages: Conflict between line and staff may still arise. Staff officers may resent their lack of authority. Co-ordination between line and staff may become difficult.
    4. Committee Organisational Structure
      1. Features: Formed for managing certain problems/situations. Are temporary decisions.
      2. Advantages. Committee decisions are better than individual decisions. Better interaction between committee members leads to better co-ordination of activities. Committee members can be motivated to participate in group decision making. Group discussion may lead to creative thinking.
      3. Disadvantages. Committees may delay decisions, consume more time and hence more expensive. Group action may lead to compromise and indecision. ‘Buck passing’ may result.
    5. Divisional Organisational Structure: In this type of structure, the organisation can have different basis on which departments are formed. They are: Function, Product, Geographic territory, Project and Combination approach.
    6. Project Organisational Structure: The line, line and staff and functional authority organisational structures facilitate establishment and distribution of authority for vertical coordination and control rather than horizontal relationships. In some projects (complex activity consisting of a number of interdependent and independent activities) work process may flow horizontally, diagonally, upwards and downwards. The direction of work flow depends on the distribution of talents and abilities in the organisation and the need to apply them to the problem that exists. The cope up with such situations, project organisations and matrix organisations have emerged. A project organisation is a temporary organisation designed to achieve specific results by using teams of specialists from different functional areas in the organisation. The project team focuses all its energies, resources and results on the assigned project. Once the project has been completed, the team members from various cross functional departments may go back to their previous positions or may be assigned to a new project. Some of the examples of projects are: research and development projects, product development, construction of a new plant, housing complex, shopping complex, bridge etc.
      1. Features: Temporary organisation designed to achieve specific results by using teams of specialists from different functional areas in the organisation.
      2. Importance of Project Organisational Structure. Project organisational structure is most valuable when Work is defined by a specific goal and target date for completion, Work is unique and unfamiliar to the organisation, Work is complex having independent activities and specialized skills are necessary for accomplishment, Work is critical in terms of possible gains or losses, Work is not repetitive in nature.
      3. Characteristics of project organisation: Personnel are assigned to a project from the existing permanent organisation and are under the direction and control of the project manager. The project manager specifies what effort is needed and when work will be performed whereas the concerned department manager executes the work using his resources. The project manager gets the needed support from production, quality control, engineering etc. for completion of the project. The authority over the project team members is shared by project manager and the respective functional managers in the permanent organisation. The services of the specialists (project team members) are temporarily loaned to the project manager till the completion of the project. There may be conflict between the project manager and the departmental manager on the issue of exercising authority over team members. Since authority relationships are overlapping with possibilities of conflicts, informal relationships between project manager and departmental managers (functional managers) become more important than formal prescription of authority. Full and free communication is essential among those working on the project.
    7. Matrix Organisational Structure: It is a permanent organisation designed to achieve specific results by using teams of specialists from different functional areas in the organisation. This type of organisation is often used when the firm has to be highly responsive to a rapidly changing external environment. In matrix structures, there are functional managers and product (or project or business group) managers. Functional manager are in charge of specialized resources such as production, quality control, inventories, scheduling and marketing. Product or business group managers are incharge of one or more products and are authorized to prepare product strategies or business group strategies and call on the various functional managers for the necessary resources.
      1. Feature: Superimposes a horizontal set of divisions and reporting relationships onto a hierarchical functional structure.
      2. Advantages: Decentralised decision making. Strong product/project co-ordination.Improved environmental monitoring. Fast response to change.Flexible use of resources. Efficient use of support systems.
      3. Disadvantages: High administration cost. Potential confusion over authority and responsibility. High prospects of conflict. Overemphasis on group decision making. Excessive focus on internal relations.
    8. Hybrid Organisational Structure: Used in organisations that face considerable environmental uncertainty that can be met through a divisional structure and that also required functional expertise or efficiency. This type of structure is used by multinational companies operating in the global environment, for example, International Business Machines USA. This kind of structure depends on factors such as degree of international orientation and commitment. Multinational corporations may have their corporate offices in the country of origin and their international divisions established in various countries reporting to the CEO or president at the headquarters. The international divisions or foreign subsidiaries may be grouped into regions such as North America, Asia, Europe etc. and again each region may be subdivided into countries within each region. While the focus is on international geographic structures, companies may also choose functional or process or product departmentation in addition to geographic pattern while at the head quarter’s the departmentation may be based on function
      1. Advantages: Alignment of corporate and divisional goals. Functional expertise and efficiency. Adaptability and flexibility in divisions.
      2. Disadvantages: Conflicts between corporate departments and units. Excessive administration overhead. Slow response to exceptional situations.
  11.  The Informal Organisation: An informal organisation is the set of evolving relationships and patterns of human interaction within an organisation which are not officially presented. Alongside the formal organisation, an informal organisation structure exists which consists of informal relationships created not by officially designated managers but by organisational members at every level. Since managers cannot avoid these informal relationships, they must be trained to cope with it.
    1. Characteristics. The informal organisation has the following characteristics:
      1. Its members are joined together to satisfy their personal needs (needs for affiliation, friendship etc.
      2. It is continuously changing.The informal organisation is dynamic.
      3. It involves members from various organisational levels.
      4. It is affected by relationship outside the firm.
      5. It has a pecking order: certain people are assigned greater importance than others by the informal group.
      6. Even though an informal organisational structure does not have its own formal organisational chart, it has its own chain of command.
    2. Benefits of Informal Organisation:
      1. Assists in accomplishing the work faster.
      2. Helps to remove weakness in the formal structure.
      3. Lengthens the effective span of control.
      4. Compensation for violations of formal organisational principles.
      5. Provides an additional channel of communication.
      6. Provides emotional support for employees.
      7. Encourages better management.
    3. Disadvantages of informal organisation:
      1. May work against the purpose of formal organisation.
      2. Reduces the degree of predictability and control.
      3. Reduces the number of practical alternatives.
      4. Increases the time required to complete activities.
  12. Departmentalisation. Departmentalization (or departmentalisation) refers to the process of grouping activities into departments. Division of labour creates specialists who need coordination. This coordination is facilitated by grouping specialists together in departments.
  13. Types of Departmentalisation.
    1. Functional departmentalization – Grouping activities by functions performed. Activities can be grouped according to function (work being done) to pursue economies of scale by placing employees with shared skills and knowledge into departments for example human resources, IT, accounting, manufacturing, logistics, and engineering. Functional departmentalization can be used in all types of organizations
    2. Product departmentalization – Grouping activities by product line. Tasks can also be grouped according to a specific product or service, thus placing all activities related to the product or the service under one manager. Each major product area in the corporation is under the authority of a senior manager who is specialist in, and is responsible for, everything related to the product line. LA Gear is an example of company that uses product departmentalization. Its structure is based on its varied product lines which include women’s footwear etc.
    3. Customer departmentalization – Grouping activities on the basis of common customers or types of customers. Jobs may be grouped according to the type of customer served by the organization. The assumption is that customers in each department have a common set of problems and needs that can best be met by specialists. The sales activities in an office supply firm can be broken down into three departments that serve retail, wholesale and government accounts.
    4. Geographic departmentalization – Grouping activities on the basis of territory. If an organization’s customers are geographically dispersed, it can group jobs based on geography. For example, the organization structure of Coca-Cola has reflected the company’s operation in two broad geographic areas – the North American sector and the international sector, which includes the Pacific Rim, the European Community, Northeast Europe, Africa and Latin America groups.
    5. Process departmentalization – Grouping activities on the basis of product or service or customer flow. Because each process requires different skills, process departmentalization allows homogenous activities to be categorized. For example, the applicants might need to go through several departments namely validation, licensing and treasury, before receiving the driver’s license.
    6. Divisional departmentalization. When the firm develops independent lines of business that operate as separate companies, all contributing to the corporation profitability, the design is call divisional departmentalization or (M-FORM). For example, the Limited. Inc., has these division: Th Limited, Express, Lerner New York, Lane Bryant and Mast Industries.
  14. Concept of Delegation. A manager alone cannot perform all the tasks assigned to him. In order to meet the targets, the manager should delegate authority. Delegation of Authority means division of authority and powers downwards to the subordinate. Delegation is about entrusting someone else to do parts of your job. Delegation of authority can be defined as subdivision and sub-allocation of powers to the subordinates in order to achieve effective results.
  15. Elements of Delegation.
    1. Authority – in context of a business organization, authority can be defined as the power and right of a person to use and allocate the resources efficiently, to take decisions and to give orders so as to achieve the organizational objectives. Authority must be well- defined. All people who have the authority should know what is the scope of their authority is and they shouldn’t misutilize it. Authority is the right to give commands, orders and get the things done. The top level management has greatest authority.
    2. Authority always flows from top to bottom. It explains how a superior gets work done from his subordinate by clearly explaining what is expected of him and how he should go about it. Authority should be accompanied with an equal amount of responsibility. Delegating the authority to someone else doesn’t imply escaping from accountability. Accountability still rest with the person having the utmost authority.
    3. Responsibility – is the duty of the person to complete the task assigned to him. A person who is given the responsibility should ensure that he accomplishes the tasks assigned to him. If the tasks for which he was held responsible are not completed, then he should not give explanations or excuses. Responsibility without adequate authority leads to discontent and dissatisfaction among the person. Responsibility flows from bottom to top. The middle level and lower level management holds more responsibility. The person held responsible for a job is answerable for it. If he performs the tasks assigned as expected, he is bound for praises. While if he doesn’t accomplish tasks assigned as expected, then also he is answerable for that.
    4. Accountability – means giving explanations for any variance in the actual performance from the expectations set. Accountability can not be delegated. For example, if ’A’ is given a task with sufficient authority, and ’A’ delegates this task to B and asks him to ensure that task is done well, responsibility rest with ’B’, but accountability still rest with ’A’. The top level management is most accountable. Being accountable means being innovative as the person will think beyond his scope of job. Accountability, in short, means being answerable for the end result. Accountability can’t be escaped. It arises from responsibility.
  16. Difference: Authority and Responsibilty
    Authority Responsibility
    It is the legal right of a person or a superior to command his subordinates. It is the obligation of subordinate to perform the work assigned to him.
    Authority is attached to the position of a superior in concern. Responsibility arises out of superior-subordinate relationship in which subordinate agrees to carry out duty given to him.
    Authority can be delegated by a superior to a subordinate Responsibility cannot be shifted and is absolute
    It flows from top to bottom. It flows from bottom to top.
  17. Conclusion. Organizing, like planning, must be a carefully worked out and applied process. This process involves determining what work is needed to accomplish the goal, assigning those tasks to individuals, and arranging those individuals in a decision‐making framework (organizational structure). The end result of the organizing process is an organization — a whole consisting of unified parts acting in harmony to execute tasks to achieve goals, both effectively and efficiently.  A properly implemented organizing process should result in a work environment where all team members are aware of their responsibilities. If the organizing process is not conducted well, the results may yield confusion, frustration, loss of efficiency, and limited effectiveness.
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    7. https://en.wikipedia.org/wiki/Departmentalization
    8. http://managementstudyguide.com/delegation_of_authority.htm
    9. https://www.cliffsnotes.com/study-guides/principles-of-management/creating-organizational-structure/the-organizational-process