Summary
Highlights
Organizing involves structuring resources and activities to achieve objectives efficiently and effectively. It also refers to the arrangement and relationship of positions within an organization, which is called the structure, and the result of the organizing process is the structure itself.
Formal organization details lines of responsibilities, authority, and position. It is described through organizational charts, organizational manuals, and policy manuals. Three types of organizational charts are discussed: functional, product/market, and matrix.
In a functional organization, everyone engaged in one functional activity (e.g., engineering, marketing) is grouped into one unit. For example, a company might have a VP for Marketing, VP for Construction, VP for Finance, and VP for Human Resources, all reporting to the President.
This type of organization is appropriate for large corporations with multiple product lines or related industries. Managers report to the president based on products or markets, such as VPs for government accounts, industrial accounts, or residential accounts, each with their own marketing, finance, and HR teams.
A matrix organization is a permanent structure designed to achieve specific results by using teams of specialists from different functional areas. It represents a cross-functional approach, with individuals potentially reporting to both a functional manager and a project manager.
Three types of authority are discussed: line authority, staff authority, and functional authority. Line authority gives managers the right to tell subordinates what to do. Staff authority allows specialists to give advice to a superior. Functional authority grants specialists the right to oversee lower-level personnel involved in their specialty, regardless of their departmental placement.
This concludes the discussion on organizing within the lecture series, emphasizing the importance of understanding these concepts for industrial organization and management.