Chapter 02

ORGANIZATION
CHAPTER 02: ORGANIZATIONAL STRUCTURE AND FUNCTIONS

DEFINING ORGANIZATIONS AND ITS STRUCTURE

© 2008 Prentice Hall, Inc. All rights reserved. 1

Management
Harold Koontz
Where Managers Work
Organization
A coordinated social unit that functions on a continuous
basis to achieve a common aim/goal or set of goals.
What Is An Organization?
An Organization Means
A deliberate arrangement of people to
accomplish some specific purpose
Common Characteristics of
Organizations
Have a distinct purpose (aim)
Are composed of people
Have a deliberate structure

W h a t M a n a g e rs D o
Managers ( or administrators )
Individuals who achieve goals through other people.

Managerial
Managerial Functions
Functions
11. . Planning
Planning
22. . Organizing
Organizing
33. . Leading
Leading
44. . Controlling
Controlling
Functions in Organization

Top Level Management

Middle Level Management

First-Line
Management

3
Levels of Organizational Structure

Corporate Corporate
Office
Office

Business
Offices Unit 1 Unit 2 Unit 3

Functional Department A Department E Department F

Department B Department D etc
Offices
Levels in Organizational Structure
Corporate-level
The company’s grand level where top
Management is involved in overall
planning and decession making.
Business-Level
Middle Management further defines the
company goals more clearly.
Communicates these goals to the First
Line Management.

Functional Level

First line Managers take the plans of
Middle Management and start the
operations of the organization.

Corporate Level Management

Functions
Functions to
to……

Creating
Creating aa policy
policy for
for change
change

Developing
Developing attitudes
attitudes ofof ownership
ownership in
in
employees
employees
Monitoring
Monitoring thethe performance
performance of
of
Managers
Managers at
at
Business
Business Level
Level
Creating
Creating aa positive
positive organizational
organizational
culture
culture through
through language
language and
and action
action
3.1
Business Level Management
Functions
Functions to
to……

Setting
Setting objectives
objectives consistent
consistent with
with top
top
management
management goals
goals and
and planning
planning strategies
strategies

Coordinating
Coordinating and
and linking
linking groups
groups,,
departments
departments,, and
and divisions
divisions

Monitoring
Monitoring the
the performance
performance
of
of subunits
subunits and
and Managers
Managers at
at Functional
Functional
Level
Level

Implementing
Implementing the
the changes
changes or
or strategies
strategies
3.2 generated
generated by
by top
top managers
managers
Functional Level Managers

Functions
Functions to
to……

Managing
Managing the
the performance
performance of
of
operative
operative employees
employees

Teaching
Teaching operative
operative employees
employees
how
how to
to do
do their
their jobs
jobs

Making schedules and

Making schedules and operating
operating plans
plans based
based
on
on
middle
middle management
management’’ss intermediate
intermediate--range
range plans
plans
3.3
ORGANIZATION STRUCTURES

Formal & Informal Organizations

FORMAL ORGANIZATIONS

Organizations in which activities or functions

are performed according to a pre defined
method.
Examples:

Universities, Colleges and Schools.

Business organizations like Banks, Factories
and Hospitals etc.
ORGANIZATION STRUCTURES

Formal & Informal Organizations

INFORMAL ORGANIZATIONS

Organization in which activities or functions are

performed without any pre defined method.
Examples:

Cafeteria and Common room etc.