February 1, 2018

The Nature of Organizing - Review Notes

Shortcoming of Management Theory in the Area of Organization

I would like to mention right at the start that Henri Fayol clearly wrote that material organization and people organization are to be be set up by managers after the planning function is completed for a project or a period. But in his brief note, Fayol discussed only people organization. Authors subsequent to Fayol have not progressed further. The development of material organization was not attempted by authors of books on management and principles of management. It is a big shortcoming in the theory of management and somebody has to fill it.

In this connection I appreciate the following definitions/explanations of public administration.

Felix A. Nigro - “Administration is the organisation and use of men and materials to accomplish a purpose”.

J.M. Pfiffner and R. Presthus - “Administration is the organisation and direction of human and material resources to achieve desired ends”.

We need to study the full descriptions of administration by Nigro and Pfiffner-Presthus to understand organization of material resources.

The Nature of Organizing - Explanation by Koontz and O'Donnel 

Koontz and O'Donnel explain organizing as (1) the identification and classification of required activities. (2) the grouping of activities necessary to attain objectives, (3) the assignment of each grouping to a manager with the authority (delegation) necessary to supervise it, and (4) the provision of coordination horizontally (on the same organizational level) and vertically( departments with headquarters etc.)

The first step identification and classification of required activities is based on the technology or techniques employed. One has to first create one person equivalent jobs from the total activities needed to be done by the organization. This one person equivalent jobs are to be created so that each person is effective and efficient (that is he able to produce the required product feature or service feature to the specification and he is able to have high productivity). Only when this stage is done that the second stage of grouping of the activities or people into units to be put under managers can be attempted.  A single person cannot do all the managing activities for all the activities to be done in an organization. So middle managers are necessary between a CEO (chief manager in more general terms) and actual operators who are predominantly technical people. Managers have business skills, people skills and training skills in the technical activities that they manage. As it has been stated at the starting management texts ignored the process involved in the first step totally.

Organization implies a formalized intentional structure of roles or positions.  Intentional structure means each person in the structure has a certain specified role designed to ensure that required activities to fulfill the objectives of the organization are carried out effectively and efficiently in groups.

While organization implies a formalized intentional structure of roles which is the formal organization built by managers, an informal organization comes into existence certain people help each other in their employment related work as well as personal work.

Formal organization

Formal organization must be flexible. There should be room for discretion, for advantageous utilization of creative talents, and also for adjusting roles based on individual likes and dislikes. Yet efforts of all individuals must be channeled toward group and organization goals.

Informal organization

Chester Barnard recognized informational organization.

Span of control or management

Span of control refers to the number of subordinates a person can supervise. This number is usually four to eight at top levels and eight to fifteen at lower levels.


Logic of organizing

13th Edition by Heinz Weirich, Mark V. Cannice and Harold Koontz

They explain the process or logic or organizing in the following steps:

1. Establishing enterprise objectives.
2.Formulating supporting objectives, policies, and plans.
3. Identifying, analyzing, and classifying the activities necessary to accomplish these objectives. (Technology adopted is a major determinant of activities and then the capital equipment and raw materials also play a role in the activities necessary. Human resource requirement is arrived at on the basis of technology, capital equipment and raw material inputs)
4. Grouping these activities in light of the human and material resources available and the best way under the circumstances of using them.
5. Delegating to the head of each group the authority necessary to perform the activities.
6. Tying the groups together horizontally and vertically, through authority relationships and information flows.

The steps three and four are important steps but have not received attention and have not been developed in basic management theory.

3. Identifying, analyzing, and classifying the activities necessary to accomplish these objectives.
4. Grouping these activities in light of the human and material resources available and the best way under the circumstances of using them.

In the step 3 activities required to accomplish the objectives have to be identified. This requires identification various technologies, required equipment,  energy sources and materials. Even the feasibility of training personnel in the technology and use of materials has to be considered. An optimal combination that provides return on investment has to be identified. It is a complex and iterative process that needs to be developed and described for proper management practice.

4. Grouping these activities in light of the human and material resources available and the best way under the circumstances of using them.

Note that step 4 brings the material resources into picture to group activities. Hence organization process assumes that material resource decisions are taken before hand. But where and when in the management process. This aspect was not specified. This is the drawback that I am referred in the current theory of management.

Basic Questions for Effective Organizing of Human Resources

1. What determines the span of management and hence, levels of organization?
2. What determines the basic framework of departmentation, and what are the strengths and weaknesses of the basic forms?
3. What kinds of authority relationships exist in organizations?
4. How should authority be dispersed throughout the organization structure, and what determines this dispersion?
5. How should the manager make organization theory work in practice?

Please give your comments and suggestions on issues to be added to this short revision notes. Also please inform the recent research in this area.

Updated 2018 - 1 February,

  1 Feb 2016,   2 Feb 2015,  5 Jan 2015, 28 July 2014, 12 Dec 2011

MBA Core Management Knowledge - One Year Revision Schedule

Related topics

Related topics

The Nature and Purpose of Planning
The Nature of Organizing
Resourcing - A Function of Management
Leading - Introduction
Planning and Execution - Theory and Practice
The System and Process of Controlling