Chapter 9

Organising
Presentation prepared by

Lucy Miller
Macquarie University

Organising
Learning objectives:
What is organising as a management function?
What are the major organisation structures?
What are the essentials of organisational design?
How do contingency factors influence design?
What are the new developments in organisation
structures and operating systems?
What are the major issues in subsystems design?
What organising trends are changing the
workplace ?
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Organising as a management
function
Organising
The process of arranging people and other
resources to work together to accomplish a goal.
Involves creating a division of labour for task
performance and coordinating results to achieve
a common purpose.
Given a clear mission, core values, objectives and
strategy, organising begins the process of
implementation by clarifying jobs and working
relationships.

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Organising as a management
function

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Organisation structure
Organisation structure
The way in which various parts of an
organisation are formally arranged.
The system of tasks, workflows, reporting
relationships and communication channels
that link the work of diverse individuals and
groups.
Structure must be handled in a contingency
fashion; as environments and situations
change, structures must often change too.
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Formal structure
Organisation chart
A diagram that shows reporting relationships
and the formal arrangement of work positions
within an organisation.
Identifies various positions and job titles, as
well as the lines of authority and
communication between them.
This is the formal structure, or the structure of
the organisation in its official state. It represents
the way the organisation is intended to function.
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Formal structure
What can you learn from an organisation chart?
Division of work: Positions and titles show
work responsibilities.
Supervisory relationships: Lines show
who reports to whom.
Communication channels: Lines show
formal communication flows.
Major subunits: Positions reporting to a
common manager are shown.
Levels of management: Vertical layers of
management are shown.
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Informal structure
An informal structure is a shadow organisation
made up of the unofficial, but often critical,
working relationships between organisational
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 learning is increasingly recognised as
an important resource for organisational
development.
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Departmentalisation
Departmentalisation
The grouping of work positions into formal
teams or departments which are linked in a
coordinated fashion within the larger
organisation.
The three major types of organisation structure
are:
The functional structure
The divisional structure
The matrix structure
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Functional structures
In functional structures, people with similar
skills and performing similar tasks are formally
grouped together into work units.
Members of functional departments share
technical expertise, interests and responsibilities.
Major advantages of functional structures include:
economies of scale;
high-quality technical problem-solving;
in-depth training and skills within functions.

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Functional structures

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Divisional structures
A divisional structure groups together
people working on the same product, in the
same area, with similar customers, or involved
in the same processes.
The major types of divisional approaches are
the product, geographical, customer and
process structures.
Divisional structures are common in complex
organisations.

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Divisional structures

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Divisional structures
Product structures group together jobs and
people working on a single product or service.
Geographical structures group together people
and jobs performed in the same location.
Customer structures group together people and
jobs that serve the same customers or clients.
Work process: Group of tasks related to one
another that collectively create something of
value to a customer.
Process structures group jobs and activities
that are part of the same processes.
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Matrix structures

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Organisational design
Organisational design is the process of
creating structures that best serve a
companys mission and objectives.
The ultimate purpose of
organisational design is
to create an alignment
between supporting
structures and
situational challenges.

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Bureaucratic designs

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Adaptive designs
Adaptive organisations:
Minimum of bureaucratic features; encourage
worker empowerment and teamwork.
Organic designs
Decentralised, with fewer rules and
procedures, open divisions of labour, wide
spans of control and more personal
coordination.
Learning organisation
Continuously changes and improves using the
lessons of experience.
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Virtual designs
Virtual organisations
Shifting networks of strategic alliances linked
by technology, with very little physical
infrastructure, that are engaged as needed.
Electronic communications technologies form
the basis of the virtual organisation.
Mobility of work
Hybrid nature can consist of a loose
framework brought together for a given time
period to achieve a mutual objective.
Lack of boundaries and inclusiveness.
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Contingencies in organisational
design: Environment

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Contingencies in organisational
design: Strategy
Stability oriented strategies:
Assume little change is occurring in the
external environment, so plans/operations
can be programmed to be implemented
routinely.
Growth oriented strategies:
Organisational design will need innovation
and flexibility to respond to changing
external environment.

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Size and life cycle

The organisational life cycle:
The evolution of an organisation over time.
Stages:
1.Birth stage founded by an entrepreneur
2.Youth stage starts to grow rapidly
3.Midlife stage grown large with success
4.Maturity stage stabilises at a larger size

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Contingencies in organisational
design: Size and life cycle
In the organisational life cycle, an organisation
passes through different stages from birth to
maturity.

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Contingencies in organisational
design: Human resources
People are also a contingency factor.
A good design provides people with the
supporting structures they need in order to
achieve.
Modern management theory argues that there
should be a good fit between organisational
structures and human resources.

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Team structures
Cross-functional teams bring together
members from different functional
departments.
Project teams are convened for a particular
task or project and disbanded once it is
completed.

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Network structures

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Subsystem design and

integration
Subsystems
Smaller components of a larger system.
Differentiation
The degree of difference that exists between
the internal components of an organisation.
Sources of subsystems differentiation:
Planning and action horizons vary.
Objectives vary due to task variation.
Interpersonal orientation varies relations.
Formal structure affects behaviours.
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Subsystem design and

integration
How to improve subsystem integration:
Rules and procedures
Hierarchical referral
Planning
Direct contact
Liaison roles assign formal coordinators
Task forces temporary teams
Teams permanent teams with authority
Matrix organisations
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Organising trends
The upside-down pyramid puts customers
at the top, served by workers at the middle,
whose managers support them at the bottom.
Chain of command
Links persons with successively higher
levels of authority.
Organisations are being streamlined
flatter more horizontal structures being
viewed as a competitive advantage.
Less unity-of-command, in which each
person reports to only one supervisor.
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Organising trends

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Organising trends
Delegation is the process of distributing and
entrusting work to other persons.
Ground rules for effective delegation include:
Carefully choose the delegate.
Clearly define the responsibility.
Agree on objectives and standards.
Agree on a performance timetable.
Give authority and show trust.
Provide performance support and feedback.
Help when things go wrong.
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Organising trends
Centralisation
The concentration of authority for most
decisions at the top level of an organisation.
Decentralisation
The dispersion of authority to make decisions
throughout all levels of the organisation.
Where empowerment and related forces are
contributing to more decentralisation, advances
in IT allow centralised control to be retained.

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Chapter 9 Organising
Summary:
What is organising as a management function?
What are the major types of organisation structures?
What are the essentials of organisational design?
How do contingency factors influence design?
What are the new developments in organisation
structures and operating systems?
What are the major issues in subsystems design?
What organising trends are changing the workplace?

John Wiley and Sons