Organisation is the detailed arrangement ofwork and working conditions in order toperform the assigned activities in an effectivemanner.
“An identified group of people contributing their efforts towards the attainment of goals is called an organisation” - Mc Farland"Organisation is the process of identifying and grouping of theworks to be performed, defining and delegating responsibility andauthority and establishing relationships for the purpose of enablingpeople to work most efficiently" - Louis A. Allen
Organising helps Organisations toreap the benefit of specialization.Organising provides for Optimum utilization of resources. Organising helps in Effective administration.Organising channels for Expansion and growth.Organising achieves co-ordination among different departments. Organising creates scope for new change.
• According to this principle, all the functions in a concern should bePrinciple of Functional completely and clearly defined to the managers and subordinates. This can be done by clearly defining the Definition duties, responsibilities, authority and relationships of people towards each other. • According to the principle, the whole work of a concern should be Principle of divided amongst the subordinates on the basis of qualifications, Specialization abilities and skills. It is through division of work specialization can be achieved which results in effective organization. Principles of Span of • According to this principle, span of control is a span of supervision which depicts the number of employees that can be handled and Control/Supervision controlled effectively by a single manager • Scalar chain is a chain of command or authority which flows from top Principle of Scalar to bottom. With a chain of authority available, wastages of resources Chain are minimized, communication is affected, overlapping of work is avoided and easy organization takes place. Principle of Unity of • It implies one subordinate-one superior relationship. Every Command subordinate is answerable and accountable to one boss at one time.
Formal Organization• Consciously created to achieve organizational objectives• Official hierarchy of relations• Formal relations are well planned and are created deliberately• Follows official chain of command• Usually stable• Formal authority is institutional• Reflects technological aspect and not human sentiments• Follows a rigid structure of relationships• Prescribed pattern of behavior for its members
Informal Organization• Has no predetermined objectives• Structure is based on human emotions and sentiments• Relations are unplanned• Does not have a fixed chain of command• Life of informal groups is short• Informal authority is personal• Leaders are not appointed• Reflects human aspect• Loosely structured and is highly flexible• Develops social norms of behavior through mutual consent
Identification of activities - All the activities which have to be performed in a concern have to be identified first Departmentally organizing the activities - In this step, the manager tries to combine and group similar and related activities into units or departments Classifying the authority - Once the departments are made, the manager likes to classify the powers and its extent to the managers. Co-ordination between authority and responsibility - Relationships are established among various groups to enable smooth interaction toward the achievement of the organizational goal.
Organisation structure is the pattern ofrelationships among various components orparts of the organisation which prescribes therelations among various activities andpositions. An effective structure will result inincreased profitability of the enterprise.whenever an enterprise grows in size orcomplexity it needs an adequate organisationstructure.
Line Organisation Structure: Hierarchy derived from a scalarprocess. Organisation is quite simple in understanding andimplementation. this does not offer scope for specialization.Line and Staff Organisation Structure: Staff personnelgenerally specialists in their fields advice line managers to performtheir duties. Staff personnel have right to recommend, but have noauthority.Functional Organisation: Grouping of activities on the basisof functions required for the achievement of ultimate objectives.Divisional Organisation Structure: Several fairly self-contained autonomous units were created. Each unit was headedby a manager and is directly accountable to the organisation.
Line Organization General Manager Production Manager Finance Manager Marketing Manager Superintendent Asstt. Asstt. Finance Manager Marketing Manager Foreman Accountants Sales Supervisors Workers Clerks SalesmenIt consists of an uninterrupted series of authority steps and forms ahierarchical arrangement. It not only becomes the avenue ofcommand to operating personnel but also provides the channel ofcommunication, coordination and accountability in enterprise.
Line and Staff Organization Board of Directors Executive ---- Managing Director----Controller of --------Asstt. To Committee Finance Managing Director Manager Division A Manager Division B Manager Division C1. Right to decide and command2. Contributes directly to the accomplishment of objectives3. Flows downward from a superior to subordinate4. Creates superior-subordinate relationship5. Bears final responsibility for results6. Provides channel of communication
Functional Organization Managing Director Production Manager Engineer Superintendent Chemist of ProductionForeman Foreman Foreman Foreman Workmen Workmen Workmen This is based on the concept of functional foremanship. In this Organization is divided into a number of functional areas. Each function is managed by an expert in that area.
Project Organization Managing Director Manager Project Manager Project Division I Division IIEngineer R&D A/c R&D A/c Engineer Manager officer Manager officer1. Oriented towards the completion of a project2. Molding the organization around a specific project3. It is usually structured to facilitate planning and designing of the product, completion of the task and phasing out of the project4. Need for project organization is felt when an organization is to execute a project which is subject to high standards of performance5. Assignment presents a unique or unfamiliar change
Matrix Organization Division X Production Engineering Finance PersonnelProj. Mgr. I Prod Grp Engg Grp Fin Grp Pers. GrpProj Mgr II Prod Grp Engg Grp Fin Grp Pers. Grp1. It is created by merging the two complementary organizations – the project and the functional2. projects cut across the functional line3. project teams are composed of people from functional departments who are assigned to the project for a specific period or for the duration of the project4. After the project is finished they return to the functional departments
Division of work: The first process of Organising includesidentification and division of work which shall be done in accordance withthe plans that are determined previously.Departmentation: once the work of identifying and dividing the workhas been done those are similar are to be grouped.Linking departments: When the process of departmentation wascompleted, linking of departments has to be done so that thosedepartments operate in a co-ordinated manner which gives a shape tooverall organisation structure.Assigning Duties: On completion of departmentation process assigningduties i.e. defining authority and responsibilty to the employees on thebasis of their skills and capabilities has to be done, which inconsequence magnifies efficiency with regard to their work.Defining hierarchal structure: Each employee should also knowfrom whom he has to take orders and to whom heis accountable/responsible.
DepartmentationDepartmentation or departmentalization is theprocess of grouping tasks into jobs, thecombining of jobs into effective work groups andthe combining of groups into identifiablesegments or departments.A department is a division ,branch, regiment orsome other organizational unit over which amanager has authority for performance of task.
Need and Importance of Departmentation Specialization Expansion Autonomy Fixation of responsibility Appraisal Administrative Control
Types of Departmentation Departmentation by Functions Departmentation by Products Departmentation by Territory Departmentation by Customer Departmentation by Process Departmentation by Time and Numbers Composite Departmentation
Functional Departmentation Board of Directors Managing Director Marketing Production Finance Quality Control Processing Material Repairs and Maintenance1. Each major function is organized as a separate department2. Basic or organic functions are the functions whose performance is vital and essential to the survival of the organization.3. A major function may be divided into minor or sub functions4. Exists almost in every organization at some level
Authority and Responsibility • Authority may be defined as the power to Authority make decisions which guides the actions of others • Responsibility is the duty to which a personResponsibility is bound by reason of his status or task.
Characteristics :Authority and Responsibility Responsibility
DelegationThe process a manager follows in dividing the work assigned to him so that he performs that part which only he has been assigned to, because of his unique organizational placement, can perform effectively and so that he can get others to help with what remains.
The number of subordinates a manager can efficiently and effectively direct Good Better Develops Increases Team spirit and communication Facilitates quicksupervision and discipline and efficiency morale and co- action control mutual trust ordination At the top level of management, the span of control should not be more than 1:6 while at the lower level of management, the span of control should not be more than 1:20.
CentralizationCentralization is systematic and consistent reservation of authority at central points within an organization. Disadvantage
DecentralizationDecentralization refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at centralauthority. It is the distribution of authority throughout organization. Disadvantage