Page 346 - Business Principles and Management

Chapter 13 • Planning and Organizing

13.3 The Organizing Function

Goals Terms
• Describe factors that managers • organization chart • accountability
should consider when organizing • responsibility • unity of command
work. • authority • span of control
• Discuss how the characteristics of
good organization contribute to a
more effective work environment.

Organizing Work

Before a plan can be put into operation, the company must be organized to
carry out the plan and perform work effectively. In Chapter 11, you learned
that organizing is concerned with determining how plans can be accomplished
most effectively and arranging resources to complete work. More specifically,
it involves arranging resources and relationships between departments and
employees and defining the responsibility each has for accomplishing work.
For example, when the plan is to start manufacturing a new product, man-
agers must determine who is involved in accomplishing each part of the job.
Making a new product would probably involve these departments: research,
manufacturing, human resources, marketing and sales, finance, and informa-
tion technology. Department managers would then determine the responsibili-
ties of the people within their departments.

THE ROLE OF ORGANIZATION CHARTS

An organization chart is a drawing that shows the structure of an organization,
major job classifications, and the reporting relationships among the organiza-
tion’s personnel. Figure 13-4 (see p. 334) is an example of an organization chart
for a retail business. The purposes of the organization chart are to (1) show the
major work units that make up the business, (2) allow employees to identify which
unit they are affiliated with, how it relates to other units, and to whom they are
accountable, and (3) identify lines of authority and formal communication within
the organization.
Large organizations usually provide new employees information through
an employee handbook or on the company’s Web site that explains the organi-
zation of the business and shows an organization chart. By understanding an
organization chart, employees have some idea of where and how they fit into
the company, how the organization works, and possible promotion opportuni-
ties. As changes occur in an organization through reorganization of work or
when major operating units are bought and sold, the company’s organization
chart can become outdated. To be a useful management and communication
tool, the chart should be revised when changes occur in the organizational
structure.

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