Chapter 4

ORGANIZING TECHNICAL ACTIVITIES

The manager needs to acquire various skills in management, including those for
organizing technical activities. In this highly competitive environment, the unskilled
manager will not be able to bring his unit, or his company, as the case may be, to
success.
The value of a superior organizational set-up has been proven dramatically during
the Second World War when a smaller American Naval force confronted the
formidable Japanese navy at Midway. Military historians indicated that the
Americans emerged victorious because of the superior organizational skills of their
leaders.
Even today, skills in organizing contribute largely to the accomplishment of the
objectives of many organizations, whether they are private businesses or otherwise.
The positive effects of business success become more pronounced when they come
as a result of international operations. International businesses, however, cannot
hope to make huge profit unless they are properly organized to implement their
plans.
REASONS FOR ORGANIZING
Organizing is undertaken to facilitate the implementation of plans. In effective
organizing, steps are undertaken to breakdown the total job into more manageable
man-size jobs. Doing these will make it possible to assign the particular tasks to
particular persons. In turn, these will help facilitate the assignment of authority,
responsibility, and accountability for certain functions and tasks.
ORGANIZING DEFINED
Organizing is a management function which refers to the the structuring of
resources and activities to accomplish objectives in an efficient and effective
manner.
The arrangement or relationship of positions within an organization is called the
structure. The result of the organizing process is the structure.
THE PURPOSE OF THE STRUCTURE
1. It defines the relationships between tasks and authority for individuals
and departments.
2. It defines formal reporting relationships, the number of levels in the hierarchy
of the organization, and the span of control.
3. It defines the groupings of individuals into departments and departments into
organization.
4. It defines the system to effect coordination of effort in both vertical
(authority) and horizontal (tasks) directions.

When structuring an organization, the manager must be concerned with the

following:
1. Division of labor determining the scope of work and how it is combined in a
job.
2. Delegation of authority the process of assigning various degrees of
decision-making authority to subordinates.
3. Departmentation the grouping of related jobs, activities, or processes into
major organizational subunits.
4. Span of Control the number of people who report directly to a given
manager.
5. Coordination the linking of activities in the organization that serves to
achieve a common goal or objective.
THE FORMAL ORGANIZATION
After a plan is adapted, management will proceed to form an organization to carry
out the activities indicated in the plan.
The formal organization is the structure that details lines of responsibilities,
authority, and position. What is depicted in the organization chart is the formal
organization. It is the planned structure and it represents the deliberate attempt
to establish patterned relationships among the components that will meet the
objectives effectively.
The formal structure is described by management through:
1. organization chart
2. organizational manual and
3. policy manuals.
The organizational chart is a diagram of the organizations official positions and
formal lines of authority.
The organizational manual provides written descriptions of authority relationships,
details the functions of major organizational units, and describes job procedures.
The policy manual describes personnel activities and company policies.
INFORMAL GROUPS
Formal organizations require the formation of formal groups which will be assigned
to perform specific tasks aimed at achieving organizational objectives. The formal
group is a part of the organization structure.
There are instances when members of an organization spontaneously form a group
with friendship as a principal reason for belonging. This group is called an informal
group. It is not part of the formal organization and it does not have a formal
performance purpose.

Informal groups are oftentimes very useful; in the accomplishment of major tasks,
especially if these tasks conform with the expectations of the members of the
informal group.
The informal organization, useful as it is, is vulnerable to expediency, manipulation,
and opportunism, according to Valentine. Its low visibility, Valentine added, makes
it difficult for management to detect these perversions and considerable harm can
be done to the company.
The manager is, therefore warned that he must be on the lookout for the possible
difficulties that the informal groups may do the organization. It will be to his best
interest if he could make the informal groups work for the organization.
TYPES OF ORGANIZATIONAL STRUCTURES
Before the commencement of activities, the decision-makers in an organization will
have to decide on what structure to adapt. Depending on the size and type of
operations, a certain structural type may best fit the requirements.
Organizations may be classified into three types. They are the following:
1. Functional Organization this is a form of departmentalization in which
everyone engaged in one functional activity, such as engineering or
marketing, is grouped into one unit.
2. Product or Market Organization this refers to the organization of a company
by divisions that bring together all those involved with a certain type of
product or customer.
3. Matrix organization an organizational structure in which each employee
reports both a functional or division manager and to a project or group
manager.

Functional Organization
Functional organization structures are very effective in smaller firms, especially
single-business firms where key activities revolve around well-defined skills and
areas of specialization.
Advantages:
1. The groupings of employees who perform a common task permit economies
of scale and efficient resource use.
2. Since the chain of command converges at the top of the organization,
decision-making is centralized, providing a unified direction from the top.
3. Communication and coordination among employees within each department
are excellent.
4. The structure promotes high-quality technical problem-solving.
5. The organization is provided with in depth skill specialization and
development.
6. Employees are provided with career progress within functional departments.
Disadvantages:

1. Communication and coordination between the departments are often poor.

2. Decisions involving more than one department pile up at the top
management level and are often delayed.
3. Work specialization and division of labor, which are stressed in a functional
organization, produce routine, no motivating employee tasks.
4. It is difficult to identify which section or group is responsible for certain
problems.
5. There is limited view of organizational goals by employees.
6. There is limited general management training for employees.

Product or Market Organization

The product or market organization, with its feature of operating by divisions, is
appropriate for a large corporation with many product lines in several related
companies.
Advantages:
1. The organization is flexible and is responsive to change.
2. The organization provides a high concern for customers needs.
3. The organization provides excellent coordination across
departments.
4. There is easy pinpointing of responsibility for product problems.
5. There is emphasis on overall product and division goals.
6. The development of the general management skills is provided.

functional

Disadvantages:
1.
2.
3.
4.
5.

There
There
There
There
There

is
is
is
is
is

a high possibility of duplication of resources across divisions.

less technical depth and specialization in divisions.
poor coordination across divisions.
less top management control.
competition for corporate resources.

Matrix Organization
A matrix, organization, according to Thompson and Strickland, is a structure with
two (or more) channels of command, two lines of budget authority, and two sources
of performance and reward. Higgins declared that the matrix structure was
designed to keep employees in a central pool and to allocate them to various
projects in the firm according to length of time they were needed.
Advantages:
1. There is more efficient use of resources than the divisional structure.
2. There is flexibility and adaptability to changing environment.
3. The development of both general and functional management skills are
present.
4. There is interdisciplinary cooperation and any expertise is available to all
divisions.
5. There are enlarged tasks for employees which motivate them better.
Disadvantages:
1. There is frustration and confusion from dual chain of command.
2. There is high conflict between divisional and functional interests.
3. There are many meetings and more discussion than action.

4. There is a need for human relations training for key employees and
managers.
5. There is a tendency for power dominance by one side of the matrix.

TYPES OF AUTHORITY
The delegation of authority is a requisite for effective organizing. It consists of three
types.
1. Line authority a managers right to tell subordinates what to do and then
see they do it.
2. Staff authority a staff specialists right to give advice to superior.

3. Functional authority a specialists right to oversee lower level personnel

involved in that specialty, regardless of where the personnel are in the
organization.
Line departments perform tasks that reflect the organizations primary goal and
mission. In a construction firm, the department that negotiates and secures
contracts for the firm is a line department. The construction division is also a line of
function.
Staff departments include all those that provided specialized skills in support of line
departments. Examples of staff departments include those which perform strategic
planning, labor relations, research, accounting, and personnel.
Staff officers may be classified into the following:
1. Personal Staff those individuals assigned to a specific manager to provide
needed staff services.
2. Specialized staff those individuals providing needed staff services for the
whole organization.
Functional authority is one given to a person or a work group to make decisions
related to their expertise even if these decisions concern other departments. This
authority is given to most budget officers of organizations, as well as other officers.

THE PURPOSE OF COMMITTEES

When certain formal groups are deemed inappropriate to meet expectation,
committees are oftentimes harnessed to achieve organizational goals. Many
organizations, large or small, make use of committees.

A committee is a formal group of persons formed for a specific purpose. For

instance, the product planning committee, as described by Millevo, is often staffed
by top executives from marketing, production, research, engineering, and finance,
who work part-time to evaluate and approve product ideas.
Committees are very useful most especially to engineering and manufacturing
firms. When a certain concern, like product development, is under consideration, a
committee is usually formed to provide the necessary line-up of expertise needed to
achieve certain objectives.
Committees may be classified as follows:
1. Ad hoc committee one created for a short-term purpose and have a limited life.
An example is the committee created to manage the anniversary festivities of a
certain firm.
2. Standing committee it is a relatively permanent committee that deals with
issues on an ongoing basis. An example is the grievance committee set up to
handle initially complaints from employees of the organization.
Committees may not work properly, however, if they are not correctly managed.
Delaney suggests that it might be useful to set up some procedure to make the
committee a more effective tool to accomplish our goals.

Chapter 5
STAFFING THE ORGANIZATION
After setting up the organizational structure that has been decided to best serve the
interest of a certain firm, the next move that has to be made is to fill up the
identified positions with the most qualified persons available.
Organizations are very sensitive to whatever staffing errors are made. Placing the
wrong person in a highly specialized position like quality control, for instance, may
bring untold damages to the firm. Yet, this refers to single error only.
An example of the ill-effects of staffing errors was provided by the TV program
Brigada Siete. The disaster that happened in the Film Center at the Cultural
Center Complex in Manila was highlighted in the program. In November 1981, the
whole sixth floor of the Film Center collapsed while undergoing a construction. Many
workers and an engineer died as a result.
When interviewed by the TV program staff, a former construction worker said he
was hired to do masonry job when he does not have training in masonry. Some
other examples of staffing errors were provided in the program.
This type of tragedy underscores the importance of staffing in any organization,
engineering or otherwise. Effective staffing, on the other hand places the
organization on a competitive stance.
WHAT IS STAFFING?
The manager must be concerned with putting the right persons in various positions
within his area of concern. Although some of the important aspects of staffing may
be delegated to the human resource office, the manager assumes a great
responsibility in assuring that right persons are assigned to positions that fir their
qualifications.
Staffing may be defined as the management function that determines human
resource needs, recruits, selects, trains, and develops human resources for jobs
created by an organization.
Staffing is undertaken to match people with jobs so that realization of the
organizations objectives will be facilitated
THE STAFFING PROCEDURE
The staffing process consists of the following series of steps:
1.
2.
3.
4.
5.
6.

Human resource planning

Recruitment
Selection
Induction and Orientation
Training and Development
Performance appraisal

7. Employment decisions
demotions) and
8. Separations

(monetary

rewards,

transfers,

promotions

and

Human Resource Planning

The planned output of any organization will require a systematic deployment of
human resources at various levels. To be able to do this, the manager will have to
involve himself with human resource planning. This will be done in conjunction with
the efforts of the human resource officer, i.e., if the company has one.
Human resource planning may involve three activities, as follows:
1. Forecasting which is an assessment of future human resource needs in
relation to the current capabilities of the organization.
2. Programming which means translating the forecasted human resource
needs to personnel objectives and goals.
3. Evaluation and Control which refers to monitoring human resource action
plans and evaluating their success.
Methods of Forecasting. The forecasting of manpower needs maybe undertaken
using any of the following quantitative methods:
1. Time series Methods which use historical data to develop forecasts of the
future.
2. Explanatory, or casual models which are attempts to identify the major
variables that are related to or have caused particular past conditions and
then use current measures of these variables to predict future conditions.
The three major types of explanatory models are as follows:
a. Regression models (presented in Chapter 2)
b. Econometric models a system of regression equations estimated from past
time-series data and used to show the effect of various independent variables
on various dependent variables.
c. Leading indicators refers to time series that anticipate business cycle turns.
3. Monitoring methods are those that provide early warning signals of
significant changesin established patterns and relationships so that the
manager can assess the likely impactand plan responses if required.
Recruitment
When the different positions have been identified to be necessary and the decision
to fill them up has been made, the next logical step is recruitment.
Recruitment refers to attracting qualified persons to apply for vacant positions in
the company so that those who are best suited to serve the company may be
selected.
Source of Applicants

When management wants to fill up certain vacancies, the following sources may be
tapped:
1. The organizations current employees. Some of the organizations current
employees may be qualified to occupy positions higher than the ones they
are occupying. They should be considered.
2. Newspaper and Advertising. There are at least three major daily newspapers
distributed throughout the Philippines. Readership is higher during Sundays.
3. Schools. These are good sources of applicants. Representatives of companies
may interview applicants inside campuses.
4. Referrals from employees. Current employees sometimes recommend
relatives and friends who may be qualified.
5. Recruitment firms. Some companies are specifically formed to assist client
firms in recruiting qualified persons. Examples of these companies are the
SGV Consulting and John Clements Consultants, Inc.
6. Competitors. These are useful sources of qualified but underutilized
personnel.
For entry-level personnel, the manager will likely rely on newspaper advertising,
schools, and referrals. When recruiting managers, the reliable sources are current
employees, recruitment firms, and competitors.
Selection
Selection refers to the act of choosing from those that are available the individuals
most likely to succeed on the job. A requisite for effective selection is the
preparation of a list indicating that an adequate pool of candidates is available.
The purpose of selection is to evaluate each candidate and to pick the most suited
for the position available.
Selection procedures may be simple or complex depending on the costs of a wrong
decision. If the management picks the wrong person and the subsequent effect to
the organization is negligible, then the selection process is simple. This is true in the
case of construction laborers where a review of their application is done. Within a
few days or even few hours, the applicants are informed of the decision.
When the position under consideration involves special skills, a more elaborate
selection process is undertaken.
Ways of Determining the Qualifications of a Job Candidate
Companies use any or all of the following in determining the qualifications of a
candidate:
1. Application blanks. The application blank provides information about a
persons characteristics such as age, marital status, address, educational
background, experience, and special; interests. After reading the application
blank, the evaluator will have some basis on whether or not to proceed
further in evaluating the applicant.

2. References. References are those written by previous employers, co-workers,

teachers, club officers, etc... Their statements may provide some vital
information on the character of the applicant.
3. Interviews. Information may be gathered in an interview by asking a series of
relevant questions to the job candidate.
4. Testing. This involves an evaluation of the future behavior or performance of
anindividual.
Types of Tests
1. Psychological Tests which is an objective, standard measure of a sample
behavior. It is classified into:
a. Aptitude test one used to measure a persons capacity or potential
ability to learn.
b. Performance Test one used to measure a persons current knowledge
of a subject.
c. Personality Test one used to measure personality traits as dominance,
sociability,and conformity.
d. Interest Test one used to measure a persons interest in various field
of work.
2. Physical Examination a type of test given to assess the physical health of an
applicant. It is given to assure that the health of the applicant is adequate to
meet the job requirements.
Induction and Orientation
After an applicant is finally selected from among the various ones and then
subsequently is hired, the next steps undertaken are induction and orientation.
In induction, the new employee is provided with the necessary information about
the company. His duties, responsibilities and benefits are relayed to him. Personnel
and health forms are filled up, and passes are issued. The company history, its
products and services, and the organization structures are explained to the new
employee.
In orientation, the new employee is introduced to the immediate working
environment and co-workers. The following are discussed: location, rules,
equipment, procedures, and training plans. Performance expectations are also
discussed. The new employee also undergoes the socialization process by pairing
him with an experienced employee and having one-on-one discussion with the
manager.
Training and Development
If the newly-hired (or newly-promoted employee is assessed to be lacking the
necessary skills required by the job, training becomes a necessity.
Training refers to the learning that is provided in order to improve performance on
the present job. Training programs consist of two general types, namely:
1. Training programs for nonmanagers

2. Training and educational programs for executives

Training Programs for Nonmanagers
This type of training is directed to nonmanagers for specific increases in skill and
knowledge to perform a particular job. The four methods under this type are:
1. On-the-job Training where the trainee is placed in an actual work situation
under the direction of his immediate supervisor, who acts as trainer. This
situation motivates strongly the trainee to learn.
2. Vestibule school where the trainee is placed in a situation almost exactly
the same as the workplace where machines, materials, and time constraints
are present. As the trainer works full time, the trainee is assured of sufficient
attention from him.
3. Apprenticeship Program where a combination of on-the-job training and
experiences with classroom instruction in particular subjects are provided to
trainees.
4. Special Courses m are those taken which provide more emphasis on
education rather than training. Examples are those which concern specific
uses of computer like computer-aided design and building procedures.
Training Programs for Managers
The training needs of managers maybe classified into four areas: decision-making
skills, interpersonal skills, job knowledge, and organizational knowledge.
The decision-making skills of the manager may be enhanced through any of the
following methods of training:
1. In-basket where the trainee is provided with a set of notes, messages,
telephone calls, letters, and reports, all pertaining to a certain company
situation. He is expected to handle the situation within a given period of 1 to
2 hours.
2. Management games is a training method where trainees are faced with a
simulated situation and are required to make an ongoing series of decisions
about the situation.
3. Case studies this method present actual situations in organizations and
enable one to examine successful and unsuccessful operations. It emphasizes
the managers world, improves communication skills, offers rewards of
solving a mystery, possess the quality of illustration, and establishes concrete
reference points for connecting theory with practice.
The interpersonal competence of the manager may be developed through any of
the following methods:
1. Role-playing is a method by which the trainees are assigned roles to play in
a given case incident. They are provided with a script or a description of a
given problem and of the key persons they are to play. The purpose of this
method is to improve theskill of the trainees in human relations, supervision,
and leadership.

2. Behavior modeling this method attempts to influence the trainee by

showing model persons behaving effectively in a problem situation. The
trainee is expected to adapt to the behavior of the model and use it
effectively in some instances later on.
3. Sensitivity Training under this method, awareness and sensitivity to
behavioral patterns of oneself and others are developed.
4. Transactional analysis is a training method intended to help individuals not
only understand themselves and others but also improve their interpersonal
communication skills.
In acquiring knowledge about the actual job the manager is currently holding, the
following methods are useful:
1. On-the-job Experience this method provides valuable opportunities for the
trainee to learn various skills while actually engaged in the performance of a
job.
2. Coaching this method requires a senior manager to assist a lower-level
manager by teaching him the needed skills and generally providing
directions, advice, and helpful criticism. The senior manager must be skilled
himself and have the ability to educate; otherwise the method will be
ineffective.
3. Understudy under this method, a manager works as assistant to a higherlevel manager and participates in planning and other managerial functions
until he is ready to assume such position himself. Once in a while, the
assistant is allowed to take over.
In an attempt to increase the trainees knowledge of the total organization,
exposure to information and events outside of his immediate job is made. In this
regard, the following methods are useful:
1. Position rotation under this method, the manager is give3n assignments in a
variety of departments. The purpose is to expose him to different functions of
the organization.
2. Multiple management this method is premised on the idea that junior
executives must be provided means to prepare them for higher management
positions. To achieve this, a junior board of directors is created consisting of
junior executives as members. The board is given the authority to discuss
problems that the senior board could discuss. The members are encouraged
to take a broad business outlook rather than concentrating on their
specialized lines of work.
Performance Appraisal
Performance appraisal is the measurement of employees performance. The
purpose for which performance appraisal is made is as follows:
1.
2.
3.
4.
5.

To
To
To
To
To

influence, in a positive manner, employee performance and development;

determine merit pay increase;
plan for future performance goals;
determine training and development needs;
assess the promotional potential of employees.

Ways of Appraising Performance

An employees performance may be measured using any of the following methods:
1. Rating scale method where each trait or characteristic to be rated is
represented by a line or scale on which the rater indicates the degree to
which the individual possesses the trait or characteristic.
2. Essay method where the evaluator composes statements that best describe
the person evaluated.
3. Management by objectives method where specific goals are set
collaboratively for the organization as a whole, for various subunits, and for
each individual member.
4. Assessment center method where one is evaluated by persons other than
immediate superior. This method is used for evaluating managers.
5. Checklist method where the evaluator checks statements on a list that are
deemed to characterize an employees behavior or performance.
6. Work standards method where standards are set for the realistic worker
output and later on used in evaluating the performance of nonmanagerial
employees.
7. Ranking method where each evaluator arranges employees in rank order
from the best to the poorest.
8. Critical-incident method where the evaluator recalls and writes down
specific (but critical) incidents that indicate the employees performance. A
critical incident occurs when employees behavior results in unusual
successor failure on some parts of the job.
Employment Decisions
After evaluating the performance of employees (managerial or otherwise), the
management will now be ready to make employment decisions. These may consist
of the following:
1. Monetary rewards these are given to employees whose performance is at
par or above standard requirements.
2. Promotion this refers to a movement by a person into a position of higher
pay and greater responsibilities and which is given as a reward for
competence and ambition.
3. Transfer this is the movement of a person to a different job at the same or
similar level of responsibility in the organization. Transfers are made to
provide growth opportunities for persons involved or get rid of a poor
performing employee.
4. Demotion this is a movement from one position to another which has less
pay or responsibility attached to it. Demotion is used as a form of punishment
or as a temporary measure to keep an employee until he is offered a higher
position.
Separation
Separation is either a voluntary or involuntary termination of an employee. When
made voluntarily or involuntarily termination of employee. When made voluntarily,

the organizations management must find out the real reason. If the presence of
defect in the organization is determined, corrective action is necessary.
Involuntary separation (or termination) is the last option that the management
exercises when an employees performance is poor or when he/she committed an
act violating the company rules and regulations. This is usually made after efforts
fail to produce positive results.