Organizing Demystified: The Organizing Function in New and Existing Businesses

Organizing is a function of management and it involves utilizing the resources of the organization and coordinating its activities to help the organization achieve its goals. An organization’s resources include its human, intellectual, technological, financial, material and other assets. Its activities might include such things as staffing, producing and selling.

Organizational charts are visual representations of the various levels of positions that reflect a span of authority in firms and this arrangement – with their descriptions (e.g. CEO, President, Vice-President, and Director of Marketing etc.) – indicate the chain of command, or who reports to whom in the firm.

The amount of levels depicted on an organizational chart is usually indicative of the complexity of the enterprise.  The structure of an organization depends on the nature of the tasks to be accomplished, and supports the strategy of the business.

In any organization there are many different activities that create divisions and specialization of labor, i.e. larger activities or tasks are broken down and assigned to different people, departments or teams.   In a new single-owner start-up venture the entrepreneur wears many hats and performs these activities with no thought of such concepts as “division of labor, “specialization” or even “organizational charts”. 

At this point the entrepreneur is the President and CEO, making executive decisions and crafting strategy; she is the Project Manager, the Office Manager, and head of every “department”, integrating the “duties” of the different “departments” ; making decisions on every activity; utilizing various skills and employing different approaches and techniques to each task.  And all the while she is coordinating these different activities much like a choreographer or a musician coordinates a dance or musical arrangement.

During this start-up period, even if the new venture is basically an organization made up of one (the owner) it is a good idea for new business owners to consciously relate these activities to the structure of their organizations and create their own visual representation of these positions; the departments they represent, and the various activities performed. This visual representation would emerge as an organizational chart.

Doing so will help them to better envision the structure of their organizations; how the coordination of the efforts of the various parts, departments or divisions are linked, and how they affect the whole.

Another benefit of this type of effort is that it will clarify in the mind of the business owner the type of communication and cross collaboration methods that these different departments must have in place, and engage in. Integrating these activities is necessary for the organization to achieve its goals. As the business grows and more staff is added the understanding, and habit, of cross-departmental collaboration will be firmly embedded in the cultural DNA of the organization. This is important because in the organizing function, effective communication and collaboration are both crucial to the achievement of organizational goals.

 © 2009 Ruth M Tappin


Four Major Forces Creating Change in Organizations Today: Skills That Leaders Need

Globalization, technological changes, knowledge management and cross boundaries collaboration are four factors that are major forces creating change in organizations today.

These changes affect decision-making as organizations are forced to recognize that they need leaders who are innovative, creative visionaries who understand the various environments that their organizations are operating in, and are able to differentiate between these different environments.

These environments include: the external or operating environment; the competitive environment (that part of the external environment in which firms that are competing for the same market exist) and the macroenvironment in which influences such as the economy, government regulations, societal values, demographics and technology come to bear upon an organization.

Faced with such complexities leaders need to be equipped with appropriate skill-sets such as flexibility, good communication, and critical thinking and negotiation abilities. They must also be supported with the necessary resources in order to make good decisions that will benefit their organizations.


A convergence of international activities such as the increase in overseas production of goods and services; increasing consumer demands in emerging markets worldwide; declining barriers to international trade aided by rapidly changing technology, have created a globalized economy in which inter-dependency among countries has emerged as the norm today. Therefore the hiring practices of companies who are seeking the best talent have changed because the best talent might no longer be resident in the home country.

Companies have had to calibrate their hiring, training and management practices to meet this challenge. In a world where “Americans too often come across as intrusive, manipulative, and garrulous” (David, 2007, p.291), US organizations have to be respectful of the culture, customs, political, and legal differences of the countries that they are operating in.

Some of these customs affect protocol such as the exchange of gifts, the observance of holidays, and labor laws. Even accounting standards vary internationally. Therefore organizations must be sensitive to these differences when formulating operational and human resource (HR) policies for implementation abroad for, in this global environment, it is hardly likely that companies can apply the domestic policies that work at home, abroad.

Technological Change:

Technology is like a two-edged sword that can make our lives easier or worse. The Internet has revolutionized the way in which information is exchanged, communication facilitated and commerce conducted. Technology is rapidly changing and effective management demands more knowledge in these areas in order for companies to manage their resources and develop, maintain or keep their competitive edge.

While technology has enabled firms to save time and money by conducting business such as negotiations, trade, and commerce in real time, it can also facilitate the dissemination of sensitive information about a company’s practices, trade secrets and new product development in a matter of seconds.

Hackers can breach a company’s security via the internet and put companies at risk. Organizations have responded by having whole new types of departments such as Information Technology (IT) departments, headed by managers with titles such as Chief Information Officer (CIO), to manage both the opportunities and the risks associated with technological changes.

Additionally, technology has ushered in an array of high-tech devices that aid and facilitates companies in gathering and managing information, maintaining contact with their employees globally, making and communicating decisions instantaneously. This can be both a boon and a source of stress for managers and leaders who must learn to manage their choice and use of these devices. In a global economy technology can aid in knowledge management

Knowledge Management

Driving forces such as shifts in buyer demographics and preferences; technology, product and market innovation; changes in society, consumer attitudes and lifestyle all demand new ideas. This has created a need for knowledge workers.

Knowledge workers comprise a company’s intellectual capital and are made up of creative people with novel ideas and problem-solving skills. Managing its knowledge assets can give a company a competitive edge as it effectively utilizes the expertise, skills, intellect, and relationships of members of the organization.

For example, a company’s strategic management efforts can be greatly enhanced when knowledge that is resident in its international talent pool is tapped at its source, since a manager who is “closer to the ground” and part of the local culture might be better able to sense environmental changes than one who is not.

Keeping knowledge workers motivated and incentivized by both intrinsic and extrinsic means will cause organizations to re-think and change their benefits and compensation methods and, perhaps, even redefine the traditional view of the employer-employee relationship into something new, such as a company-contractor model, for example.

Cross-boundaries Collaboration

An important part of knowledge management is effectively managing organization-wide collaboration. Use of appropriate technology and applications such as a virtual private networks; VoIP, e-mail, social networking websites such as Face Book, and even company-sponsored blogs can facilitate communication between an organization and its stakeholders, and help in different types of internal and external collaborative processes. An example of a tool that can be used in cross-boundaries collaboration might be an easily accessible online database that provides a central source of information to employees, customers, or suppliers.

Managing in the 21st Century

In the 21st Century change is the norm rather than the exception and leaders must be able to embrace it. They need to be able to develop:

  • A vision, and be able to communicate it to their organizations
    An orientation to serving
    An entrepreneurial mind-set
    A commitment to continuous innovation
    A global mindset
    Ease and confidence with technology
    Know-how in systems thinking (a broad view of the inter-relationship of an organization’s parts, rather than a narrow view that is focused on one part or event.)
    A sense of ethics and appreciation of spirituality in the workplace
    A commitment to continuous learning, personal and professional development

In order to respond effectively to the four major forces creating change in todays global economy leaders must be willing to embrace change; they must be curious, trust-worthy and flexible; and they must have very strong time management, communication, conflict-management, problem-solving and people-skills in order to effectively manage these factors that are drivers of change today.


David, Fred R. (2009). Strategic Management, Concepts and Cases, 11th.ed. (p. 291). New Jersey: Pearson Prentiss Hall.

© 2009 Ruth M. Tappin
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This article was originally published on 9/09/2009