Organising

Organising work and people: the steps in organising, span of management, functional and divisional structures, formal and informal organisation, delegation and decentralisation.

Key ideas

• Organising identifies and groups the work, defines authority and responsibility, and sets up relationships so that people can work together.
• Its steps are identifying and dividing the work, departmentalisation, assigning duties, and establishing reporting relationships.
• The span of management is the number of subordinates a manager can manage well; it decides how many levels the structure has.
• A functional structure groups jobs by function (production, marketing, finance); a divisional structure groups them by product, each division with its own functions.
• Formal organisation is deliberately designed with written rules; informal organisation grows out of social contact, spreads news fast but can spread rumours and resist change.
• Delegation passes authority to a subordinate and is compulsory; decentralisation spreads authority to every level and is an optional policy.
• Authority flows downward, responsibility flows upward, and accountability cannot be delegated at all.

Remember

Watch out

• Rounding the number of supervisors down: 125 workers with a span of 10 need 13 supervisors, not 12.
• Saying accountability can be delegated: a manager stays answerable for the work he delegates.
• Treating delegation and decentralisation as the same thing.

Worked example