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Types of Organisation

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Success of the organization depends on the experience and competence of the officers of the organization. Different forms of organizations are Line, military or scalar organization, functional …

Success of the organization depends on the experience and competence of the officers of the organization. Different forms of organizations are Line, military or scalar organization, functional organization, line and staff organization, committee of organization, project organization, matrix organization and freeform organization.

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  • 1. Welingkar’s Distance Learning Division CHAPTER-11 TYPES OF ORGANISATION We Learn – A Continuous Learning Forum
  • 2. Welingkar’s Distance Learning Division Introduction o Organisation is designed on the basic of principles of labour and span of management. The success of the organisation depends upon the experience and competence of the officers of the organisation. Nature, scale and size of the business are the normal factors which determine forms of internal organisation. The following common types of organisation find a place in the structure of internal organisation. We Learn – A Continuous Learning Forum
  • 3. Welingkar’s Distance Learning Division Introduction o Line, Military or scalar organisation o Functional organisation o Line and staff organisation o Committee organisation o Project organisation o Matrix organisation o Freeform organisation We Learn – A Continuous Learning Forum
  • 4. Welingkar’s Distance Learning Division We Learn – A Continuous Learning Forum
  • 5. Welingkar’s Distance Learning Division Line Organisation o Line organisation is the simple and oldest type of organisation followed in an organisation. Under line organisation, each department is generally a complete self-contained unit. o A separate person will look after the activities of the department and he has full control over the department. We Learn – A Continuous Learning Forum
  • 6. Welingkar’s Distance Learning Division Line Organisation o The same level executives do not give or receive orders amongst themselves. But they receive orders from their immediate boss and give orders to their subordinates. Hence, all the heads are responsible to the general manager, the general manager, in turn, is responsible to the shareholders who are the owners. o This type of organisation is followed in the army on the same pattern. So, it is called military organisation. Under type of organisation, the line of authority flows from the top to bottom vertically. So it is called line organisation. We Learn – A Continuous Learning Forum
  • 7. Welingkar’s Distance Learning Division Characteristics of line organisation o It consists of direct vertical relationships. o Authority flows from top-level to level to bottom level. o Departmental heads are given full freedom to control their departments. o Each member knows from whom he would get orders and to whom he should give his orders. We Learn – A Continuous Learning Forum
  • 8. Welingkar’s Distance Learning Division Characteristics of line organisation o A senior member has direst command over his subordinates. o Operation of this system is very easy. o Existence of direct relationship between superiors and subordinates. o The superior takes decisions within the scope of his authority We Learn – A Continuous Learning Forum
  • 9. Welingkar’s Distance Learning Division Advantages and Disadvantages of Line Organisation We Learn – A Continuous Learning Forum Advantages of line organisation Disadvantages of line organisation 1. Simplicity 1. Lack of specification 2. Division of authority and responsibility 2. Over loading 3. Unity of control 3. Lack of initiative 4. Speedy action 4. Scope for favoritism 5. Discipline 5. Dictatorial 6. Economical 6. Limited communication 7. Co-ordination 7. United administration 8. Direct communication 8. Subjective approach 9. Flexibility 9. Instability 10. Lack of co-ordination
  • 10. Welingkar’s Distance Learning Division Suitability o This type of organisation is suitable to small size business units. o Where the activities are of routine nature or machine based. o If the business activities are service mined. o Where the number of persons working is small o The business operation is simple in nature. o A business unit which has straight methods of operations. We Learn – A Continuous Learning Forum
  • 11. Welingkar’s Distance Learning Division Functional organisation o Under line organisation, a single person is in charge of all the activities of the concerned department. The person in charge finds it difficult to supervise all the activities efficiently. We Learn – A Continuous Learning Forum
  • 12. Welingkar’s Distance Learning Division Functional organisation o The reason is that the person does not have enough capacity and required training. Under functional organisation, various specialists are for various functions performed in an organisation. These specialists will attend to the work which is common to different functions of various departments. Workers, under functional organisation, receive instructions from various specialists. We Learn – A Continuous Learning Forum
  • 13. Welingkar’s Distance Learning Division Functional organisation o The need for functional organisation arises out of: o The complexity of modern and large-scale organisation o A desire to use the specialization in full and; o To avoid the work-load of line managers with complex problems and decision-making We Learn – A Continuous Learning Forum
  • 14. Welingkar’s Distance Learning Division Characteristics of functional organisation o The work is divided according to specified functions. o Authority is given to a specialist to give orders and instructions in relation to specific function. o Functional authority has right and power to give command throughout the line with reference to his specified area. We Learn – A Continuous Learning Forum
  • 15. Welingkar’s Distance Learning Division Characteristics of functional organisation o The decision is taken only after making consultations with the functional authority relating to his specialized area. o The executives and supervisors discharge the responsibility of functional authority. - Route clerk - instruction card clerk - time and cost clerk - Gang boss - Speed boss - Inspector - Repair boss - Disciplinarian We Learn – A Continuous Learning Forum
  • 16. Welingkar’s Distance Learning Division Advantages and Disadvantages of Functional Organisation We Learn – A Continuous Learning Forum Advantages of functional organisation Disadvantages of functional organisation o Benefit of specialization o Application of expert knowledge o Reducing the work load o Efficiency o Adequate supervision o Relief to line executive o Co-operation o Economy o Flexibility o Mass production o Complex relationship o Discipline o Over specialization o Ineffective co-ordination o Speed of action o Centralization o Lack of responsibility o Increasing the overhead expenses o Poor administration o Suitability of functional organisation
  • 17. Welingkar’s Distance Learning Division Line and staff organisation o The line officers have authority to take decisions and implement them to achieve the objectives of the organisation. o The line officers may be assisted by the staff officers while framing the policies and plans and taking decisions organisation. We Learn – A Continuous Learning Forum
  • 18. Welingkar’s Distance Learning Division Line and staff organisation o The authority flows from top level to the lower level of the organisation through the line officers while the staff officers attached to the various departments advise the departments. The staff officers are not in a position to compel the line officers to follow the advice by them. Each department is headed by a line officer who exercises full authority regarding the planning. We Learn – A Continuous Learning Forum
  • 19. Welingkar’s Distance Learning Division Types of staff o Personal staff o Specialized staff o General staff assistant We Learn – A Continuous Learning Forum
  • 20. Welingkar’s Distance Learning Division Functions of staff officers o The staff officers assist the line officers in the planning of business activity. o The board of directors frames the policies of the business on the basis of recommendations given by the staff officers. o The managers can get the advice from the staff officers regarding the selection. ‘training’ placement and remuneration fixation the personnel We Learn – A Continuous Learning Forum
  • 21. Welingkar’s Distance Learning Division Functions of staff officers o The staff officers give regarding the method of improving the product, the technique of reducing the cost of production, increasing the profits of the concern. o The staff officers prescribe the procedures to be followed by the line officers in the execution of policies and programs. o Staff officers of a department help the manager in the preparation of budget of the department. o the staff officers may be called to solve the administrative problems encountered by the line officers in general. We Learn – A Continuous Learning Forum
  • 22. Welingkar’s Distance Learning Division Arguments of staff officers against line officers o The staff officers have only theoretical academic knowledge but not practical knowledge. o The staff officers go beyond their sphere of activity and assume that they have line officer’s authority. o Much of the advice given by the staff officers is impractical o Since the staff officers unnecessary increases the paperwork of the line officers. We Learn – A Continuous Learning Forum
  • 23. Welingkar’s Distance Learning Division Arguments of staff officers against line officers o The staffs give advice without considering the nature of business as a whole. o Staff officers are very much interested in becoming line officers of the organisation rather than impairing advice to them. We Learn – A Continuous Learning Forum
  • 24. Welingkar’s Distance Learning Division Solution to the conflict between line officers and staff officers o Both line officers and staff officers should clearly understand the nature of relationship prevailing between them. o A separate staff member should be appointed to bring about co-operation between the line officers and staff officers. o The line officers should be encouraged to use the advice of staff officers. o Only qualified persons should be selected and placed as staff officers. We Learn – A Continuous Learning Forum
  • 25. Welingkar’s Distance Learning Division Solution to the conflict between line officers and staff officers o The staff officers should be convinced by the line officers if their advice is not accepted o The responsibility for results could be fixed on both line officers and staff officers o Only experienced persons alone should be promoted as line executives.. o Remove the fear of the line officers and staff officers whether the new ideas of advice would be properly put into use or not. We Learn – A Continuous Learning Forum
  • 26. Welingkar’s Distance Learning Division We Learn – A Continuous Learning Forum Advantages of line and staff organisation Disadvantages of line and staff organisation Facilitates to work faster and better If powers are not defined then get confusion Specialization is attained Line officers may reject advice without any reason for their action Enables to utilize experience and advice Staff officers are not responsible if favorable results are not obtained. Officers can take sound advice Difference between line and staff officers will defeat the very purpose of specialization New technology or procedure can be introduced without any dislocation Line officers blame staff officers for unfavorable results and want to get rewards for favorable results Promotes efficient functioning of line officers Very good opportunity is made available to young person to get training
  • 27. Welingkar’s Distance Learning Division Committee organisation o “A Committee as a group of persons either appointed or elected who are to meet for the purpose of considering matters assigned it” Types of committee o Advisory committee problem solving committees o Fast-finding committee o Action committee We Learn – A Continuous Learning Forum
  • 28. Welingkar’s Distance Learning Division Functions of a Committee o Collect the necessary information from different sources and arrange the information orderly. o The collected information is critically analyzed. o Draft a detailed report containing the recommendations for the purpose of implementation. o Formulate the standard of performance for the purpose of evolution of actual performance in future. We Learn – A Continuous Learning Forum
  • 29. Welingkar’s Distance Learning Division Recommendations for efficient functioning of a committee We Learn – A Continuous Learning Forum Selection of subject matter Committee Role of chairman Preparation for a meeting Clear Objective Role of committee Size of the committee Selection of meeting Follow up evolution
  • 30. Welingkar’s Distance Learning Division Project organisation o The project organisation idea was developed after the second war. o A project organisation can also be the beginning of an organisation cycle. The project may become a long term or permanent effort that eventually becomes a program or branch organisation We Learn – A Continuous Learning Forum
  • 31. Welingkar’s Distance Learning Division Features of project organisation o The Success of the project organisation depends upon the co-ordination of activities o There is a grouping of a activities for each project. It leads to the introduction of a new line of a authority. We Learn – A Continuous Learning Forum
  • 32. Welingkar’s Distance Learning Division Drawbacks of Project Organisation o The professionals are deputed for the project. But there is an assurance of continuous work for the professional in a project organisation. o The decision is taken in the project organisation under pressure of the top controls the staff in an organisation. o The top management does not extend its full co- operation for the effective functioning of the project organisation. Some hindrance may be caused by the top management. We Learn – A Continuous Learning Forum
  • 33. Welingkar’s Distance Learning Division Matrix organisation o “Any organisation that employs a multiple command structure but also related support mechanisms and an associated organizational culture and behavior pattern” The matrix organisation may be followed where a large of small projects have to be managed. We Learn – A Continuous Learning Forum
  • 34. Welingkar’s Distance Learning Division Conditions for effective matrix organisation o The principle of chain of command is not followed in the matrix organisation. A project manager should give his report to more than one superior. o There should be an agreement among the managers regarding the authority of utilizing the available resources. The term resources include physical resources, financial resources and human resources. We Learn – A Continuous Learning Forum
  • 35. Welingkar’s Distance Learning Division Merits and Demerits of Matrix organisation We Learn – A Continuous Learning Forum Merits of Matrix organization Demerits of matrix organization o Achievement of objectives o Best utilization of resources o Appropriate structure o Flexibility o Motivation o Personal development o Complex relationship o Struggle for power o Excessive, emphasis on group decision-making o Arising conflict resolution o Heterogeneous
  • 36. Welingkar’s Distance Learning Division Free form organisation o This type of organisation is formed whenever a need arises to form an organisation, for achieving a particular object. it will be dissolved after achieving the object of the organisation. The free form organisation resembles the project and matrix organisation. It otherwise called organic or ratio organisation. We Learn – A Continuous Learning Forum

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