This article throws light upon the five main steps involved in organizing process. The steps are: 1. Consideration of Plans and Goals 2. Determining the Work Activities Necessary to Accomplish Objectives 3. Classifying and Grouping Activities 4. Assigning Work and Delegating Appropriate Authority 5. Designing a Hierarchy of Relationships.

Step # 1. Consideration of Plans and Goals:

Organisational plans and their goals affect organising and its outcome, the organisation. The purposes and activities that organisations have at present or are likely to have in future are dictated by plans. Certain basic purposes and some general activities are likely to remain fairly constant in the long run. For example, from its very inception a business firm will continue to seek profit and in this endeavour it will continue to employ human and non-human (material) resources.

But with the passage of time new plans will be formulated. This will surely lead to a change in the ways in which basic activities are carried out. Certain departments or divisions may be closed (as has been done by the G.K.W. in 1986) some old ones may be entrusted with additional responsibility and some new departments may be created or set up.

Moreover there may emerge new relationships among groups of decision makers. Organising is supposed to create the new structure and relation­ships and modify the old ones.

Step # 2. Determining the Work Activities Necessary to Accomplish Objectives:


It is necessary to determine those work activities which are necessary to accomplish organisation objectives. Prima facie, it is absolutely essential to prepare a list of tasks to be done. Therefore, there is the need to classify the tasks into two categories: on-going tasks and once-for-all tasks. Examples of the former are hiring, training, and record-keeping. Such tasks may also include assembling, machining, shipping, storing, inspecting, selling, advertising etc.

An example of the latter is setting up a new plant or department or installing a new plant in an existing plant. In an ongoing business such specific programmes — which are essentially single-use plans-may require temporary re-or­ganisation within a business or department to handle them. For example, the Finance Department may temporarily look after the newly set up corporate planning department.

Likewise, a pilot project conducted for an ongoing business may identify which activities should be performed in a work unit or incorporated into the business. Once managers come to know what tasks must be done, they are ready to classify and group those activities into manageable work units.

Step # 3. Classifying and Grouping Activities:

This stage demands three processes to be performed by managers:


1. Examine each activity identified to determine its general nature (marketing, production, finance, personnel, etc.).

2. Grouping those activities into these interrelated functional areas.

Establishing the basic department design for the organisation structure.

In practice, the first two processes go hand in hand. True enough, selling, advertising, shipping and storing can be considered as marketing-related activities, and can be grouped under the broad heading ‘marketing’ without any loss of generality. Likewise, assembling, cutting, machining, welding, painting and inspecting are treated as manufacturing process and can thus be grouped as production. In a similar way, activities like hiring, training, developing, recruiting and compensat­ing can be grouped under personnel-related activities.


Classifying and grouping similar activities using the guidelines of homogeneity are based on the concept of division of labour and specialization. (It may be recalled that, essentially, division of labour is breaking down the work into its basic components or activities and assigning them to individuals who will then be specialists and perform the jobs more efficiently and effectively.)

For accomplishing works which are similar in nature different tasks, processes or skills required are to be placed together so as to achieve organisational objectives.

As soon as the tasks are classified and grouped into related work units (production, marketing, accounting and personnel)the third process, viz., departmentation, is being finalized, i.e., a decision is being made on the basic organisational format or departmental structure for the enterprise. Groups, departments and divisions are being formed on the basis of the objectives of the organisa­tion.

Management will choose a departmental type of organisational format from functional, geographic or territorial, customer, product line, or matrix options. (These various alternative approaches to organising will be discussed separately.)

Step # 4. Assigning Work and Delegating Appropriate Authority:


After identifying activities necessary to achieve objectives, classifying and grouping these into major operational areas, and selecting a departmental structure, management has to assign the activities to individuals who are simultaneously given the appropriate authority to accomplish the task.

This step is a crucial one in both the initial and ongoing organising processes. The foundation of this step lies in the principle of functional definition. The principle basically suggests that in estab­lishing departments, the nature, purpose, tasks, and performance of the department must first of all be determined as a basis for authority.

The strategic implication of this principle for business is that the activities determine the type and quantum of authority necessary.

It is widely believed that the nature, purpose, tasks and expectations dictate the type and quantum of authority needed by the manager to function effectively. The activi­ties are to be assigned first. These will form the basis of authority thereafter.

Step # 5. Designing a Hierarchy of Relationships:


This final step necessitates the determination of both ver­tical and horizontal operating relationships of the organisa­tion as a whole. In effect this step is ‘putting it all together’.

Vertical Structuring:

The vertical structuring of the organisation results in a decision making hierarchy specifying the respective roles of managers at different levels in the organisational hier­archy. It shows who is in charge of each task, of each speciality area, and of the organisation as a whole.

Differ­ent levels of management (such as the lower level, middle level and the top level) are established in the organisation — from bottom to top. From these levels emerge the chain of command or hierarchy of decision-making levels, in the company.


Essentially the chain of command depicts the authority- responsibility relationships that establish links between supervisors and subordinates throughout the whole or­ganisation. As shown in Fig.9.1, it flows from the chief executive officer down to the lowest worker in the organ­isation.

Chain of Command

Unity of Command:

From the chain of command emerges a new principle, viz., unity of command, originally advanced by Henri Fayol. According to this principle, each employee in an organisation should report to and be accountable to only one immediate superior.


The implication of this principle is simple enough: the chain of command should be so clear that a subordinate will receive order from one superior and be accountable to him (her) only, hi this case also authority is delegated from the superior to the subordinate.

According to Fayol, unity of command is desirable because it simplifies communication and the assignment of responsibility. However, in today’s complex organisations, this principle is hardly followed. Instead most employees receive instructions from several managers, especially when there is functional authority. This practice, although found necessary in large organisations, leads to certain undesirable consequences.

Horizontal Structure:

Two important effects of horizontal structuring are enumerated below: Firstly, it defines the working relationships among operating departments. Secondly, it makes the final decision on the span of control (the number of subordinates under the supervision and direction) of each manager.

Organisation Chart:

As soon as this step is completed a complete organisation structure results. This structure is usually presented by formal Organisational Chart as shown in Fig.9.2. Since it depicts the basic framework of the organisation, it is of considerable value to managers.

Organisation Chart showing the organisational Structure

Uses of Formal Organisation Charts:

An organisation chart has various uses.

These are the following:

1. It shows who reports to whom — the chain of command.

2. It also shows the span of management or the span of control — how many subordinates work for each manager (As we shall see later, the span refers to the number of subordinates reporting to one superior. A tall structure shows a narrow span of management and a flat structure a wide span).

3. It shows the formal (official) channels of communication that exist. These formal channels usually reflect the authority- responsibility flow of the chain of command. Many charts also show formal communication flows that exist apart from the chain of command. In Fig. 9.2 these channels are shown through the solid lines that connect each job (box).


4. It shows how the company is structured or departmentalised — by function, customer, product, for example. In practice it is difficult to work with large groups unless they are divided into smaller groups. This process is known as departmentation.

An examination of the organisation chart enables one to see how the organisation groups its activities to accomplish its goals to the best possible level. 

5. It shows the work being done in each job — the levels on boxes — as also the degree to which specialization (division of work) is carried out.

6. It also shows the levels of hierarchy, i.e., the hierarchy of decision-making — where the decision-maker for a problem is located. An organisation charge shows the levels of management that exist in a given structure, in addition to the chain of command and reporting relationships. A tall structure portrays a large number of levels, while a flat one shows a smaller number of levels, as shown in Fig.9.3.

Span of Management Affects Levels of Hierarchy

7. It shows how current the present organisation structure is (if there is a date on the organisation chart).


8. It also shows types of authority relationships — solid connections between boxes illustrate line authority, and dotted lines show staff and functional authority.

9. Furthermore, the organisation charge can help managers locate duplications and conflicts as a result of awkward arrangements and can be used as a trouble-detector.

But the OC fails to show at least three things:

(a) the degrees of authority,

(b) the informal communication channels, and

(c) the informal relationships. Yet, in certain situations, the informal organi­sation describes the way things actually get done in an organisation.



In short, “the organisation process, like all managerial functions, is ongoing. The initial application of the process results in the organisation is activated and begins its systematic pursuit of goals, management monitors and controls its actions, successes, and failures. Changes and reassignments will take place. New plans will dictate organisational modifications, after a new application of the organising process.”