Organizing involves setting up the administrative structure for implementing strategic decisions. The administrative design area is therefore concerned with establishing the structure and the shape of the firm or organization, and defining responsibilities and lines of Publisherity. It involves a definition of the tasks necessary to achieve strategic goals, determining who is to perform these tasks and assigning responsibility for their performance. The function of organizing is to co-ordinate these tasks in such a way that the organization is able to work efficiently in fulfilling its objectives. The process of organizing is achieved through departmentalization, by which different specialism's are hived off into separate departments. These departments are linked in a hierarchy, a formal communication structure that enables instructions to be passed downwards and information to be passed upwards to senior management.

A manager may be allotted the task of managing the activities in each of these boxes, which then represent executive positions; the lines represent the formal channels of communication between them. The top five boxes represent the five major functions of this firm-marketing, manufacturing, finance, personnel and research and development. For administrative purposes, the firm is organized according to its product categories; therefore, two divisions-furniture and floor covering-are established.

At the bottom of the pyramid in the figure are the basic organizational units, known as departments; this illustrates the six departments belonging to the Furniture Division. Departments form an occupational classification-in this case they are divided into Production and Service Departments.

A major purpose of any organizational structure is to facilitate the flow of information to and from decision makers. Since management may be said to be the process of converting information into action, organizations should be designed around information flows. Each decision point in this process is a sub-information system having its own elements as input, processor and output. Hence, information networks shape the structure of the organization.

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Read on: Planning

Planning is the most basic of all management functions, and the skill with which this function is performed determines the success of all operations. Planning may be defined as the thinking process that precedes action and is directed towards making decisions now with the future in mind. Theoretically, the function of planning is to improve the quality of decision making by a careful consideration of all the relevant factors before a decision is made, and ensuring that decisions conform with a rational strategy by which the firm's future is to be shaped. Planning may be seen as consisting of five stages:Planning